Federal Update GASFAA Conference Braselton, GA Anthony Jones Office of Postsecondary Education June 2, 2005

Federal UpdateFederal Update

GASFAA ConferenceBraselton, GA

Anthony JonesOffice of Postsecondary Education

June 2, 2005

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AGENDA

President’s FY 2006 Budget Advisory Committee PART Process Student Unit Record System Default rates Use of PIN System Requirements Late Disbursements

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President’s FY 2006

Budget

(2006-2007)

President’s FY 2006

Budget

(2006-2007)

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President’s FY 2006 Budget Request

Directs taxpayer resources to students with most need

Provides significant program improvements

Saves taxpayer’s money by eliminating funding for ineffective programs

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Increases Pell annual awards and Stafford loan limits

Must make student loan program reforms to provide increased funds for students

Must eliminate ineffective programs to provide funds to neediest students

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Title IV Program BudgetsAppropriations

* President's FY 2006 Budget Submission

FY 2004 FY 2005 FY 2006*(AY 04-05) (AY 05-06) (AY 06-07)

Pell Grant $12,006,738,000 $12,364,997,280 $17,952,821,000 (Max Award) $4,050 $4,050 $4,150

FSEOG $ 770,455,000 $ 778,720,000 $ 778,720,000

FWS $ 998,502,000 $ 990,257,056 $ 990,257,000

Perkins $ 98,764,000 $ - $ - (Cancellations) $ 66,665,000 $ 66,131,680 $ -

LEAP $ 66,172,000 $ - $ - Math/Science $ - $ - $ 50,000,000

Program

65,642,624

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Title IV Program BudgetsAid Available


131,285,000

FY 2005 FY 2006*(AY 05-06) (AY 06-07)

Pell Grant $ 12,901,175,000 $ 13,591,660,000 (Max Award) $4,050 $4,150

FSEOG $ 985,722,000 $ 985,722,000 FWS $ 1,184,229,000 $ 1,184,229,000 Perkins $ 1,135,368,000 $ - LEAP $ - $ - Math/Sci. $ - $ 100,000,000 Loans $ 56,812,932,000 $ 62,468,823,000 TOTAL $ 73,019,426,000 $ 78,330,434,000

Program

73,186,351,000

166,925,000

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Title IV Program BudgetsFederal Pell Grants

FY 2006*(AY 06-07)

Funding Request $ 17,952,821,000

Prior Year Shortfall $ (4,300,821,000)

Administrative Expenses $ (27,340,000)

State Scholars $ (33,000,000)

Aid to Students $13,591,660,000

Expenditures


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Federal Pell Grant Program

Increase maximum award by $100/year over 5 years Eliminate $4.3 Billion shortfall Index minimum award Implement sixteen semester (or equivalent) cap

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Federal Pell Grant Program (cont’d)

Provide year-round awards for students attending 2- and 4-year programs Eliminate tuition sensitivity award rule Add $1,000 for students who complete the rigorous State Scholars curriculum in high school

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Federal Work-Study & FSEOG

Phase-out conditional guarantee over 5 years Replace FWS 7% community service requirement with 20% set aside


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New Programs

Presidential Math-Science Scholars ProgramLoan program for short-term

training – with Department of Labor


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FFEL and Direct Loan Programs

Increase undergraduate annual loan limits 1st Year subsidized - $2,625 to $3,500 2nd Year subsidized - $3,500 to $4,500 Beyond 2nd Year - subsidized remains $5,500 Maintain $4,000/$5,000 unsubsidized

Increase undergraduate aggregate limits Undergraduate subsidized - $23,000 to $25,000 Undergraduate Total - $46,000 to $48,000


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FFEL and Direct Loan Programs (cont’d)

Maintain graduate subsidized limits $8,500

Increase graduate unsubsidized limits $10,000 to $12,000

Increase graduate total annual loan limits $18,500 to $20,500

Increase graduate aggregate limits $138,500 to $146,500


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Reestablish low-default waivers Less than 10% for 3 years

Waivers apply to: 30-day delay for first-time, first-year borrowers Multiple disbursements for single term loans


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Extend current variable interest rates Extend teacher loan forgiveness change Require GA to deposit 1% fee Standardize repayment plans


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FFEL and Direct Consolidation Loans

Moves from fixed interest rate (weighted average) to variable rate Provide reconsolidation with 1% origination fee Repeal single holder rule


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Federal Perkins Loan Program

End new Perkins lending Offset by increased FFEL/DL loan limits

Recall of Federal portion of fund Essential to increasing Pell Grants

Develop plan to recall such as: Assignment of outstanding loans to ED Collection by school and return Federal

share


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FFEL, Direct, and Perkins Loan Programs

Reforms result in net savings Savings are essential to increasing Pell Grants for our neediest students and increasing loan limits


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Student Eligibility

Add active duty military to independent student definition Modify drug conviction eligibility rule to apply only to offenses committed while receiving Title IV aid


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Institutional Eligibility

Eliminate 50% rules for distance education programs

Eliminate 90/10 rule for proprietary institutions


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The Student Aid Gauntlet: Making Access to College Simple and Certain

Issued by the Advisory Committee on Student Financial Assistance on January 23, 2005

www.ed.gov/about/bdscomm/list/acsfa/edlite-simplification.html

Study of Simplification of Need Analysis and Application

Process

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Four National Imperatives Empower Students to make sound

decisions about higher education Make It Easy to ensure students get the

financial aid they deserve Lose The Paper to create an integrated

web-based student aid system Work Together to forge creative public-

private access partnerships

Simplification Study (cont’d)

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Performance

Assessment Rating

Tool (PART)

Performance

Assessment Rating

Tool (PART)

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PART

Government Performance & Results Act 1993: requires all Federal agencies & programs to

have measurable goals and objectives President’s Management Agenda (PMA)

2001: aims at improving the efficiency and effectiveness of Federal programs

PART Addresses the fifth element of the PMA: budget

and performance integration Is OMB-developed tool for assessing the

effectiveness of all Federal programs

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0-49Ineffective

50-69Adequate

70-84Moderately Effective

85-100Effective

RangeRating

Results Not Demonstrated

Insufficient Performance

Measures=

PART

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Pell Adequate FFEL Adequate DL Adequate FWS Results not demonstrated FSEOG Results not demonstrated Perkins Inadequate LEAP Results not demonstrated Talent Search Results not demonstrated Upward Bound Inadequate SSS Results not demonstrated GearUP Adequate

PART

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PART

http://www.whitehouse.gov/omb/part/ Impact

Budget Need for Student Unit Record

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Student Unit Record System


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National Center for Education Statistics (NCES) conducted a feasibility study of establishing a Federal student unit record system Final report released to the public March 22, 2005 http://nces.ed.gov/ipeds/urreport.asp

Report will inform the process of developing proposals for the Higher Education Act reauthorization

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Student Unit Record SystemConcerns

Privacy & confidentiality Data on students not receiving aid Unauthorized access to data

Institutional burden Transitional burden Long-term burden

Coordination Timing

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Benefits

Improves data: enrollment, program completions, graduation rates, institutional price, and student financial aid

Captures data on: Changing patterns of enrollment and completions Impact of Federal programs, including the student

financial aid programs Enables creating mission-sensitive

institutional outcome measures

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Default Rates Default Rates

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National Student Loan Default RatesNational Student Loan Default Rates

Issued date: 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

17.2

21.4

22.4

17.8

15

11.610.7

10.49.6

8.8

6.9

5.6 5.95.4

0

5

10

15

20

25

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

5.2

Per

cent

age

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SASFAA Default Rates (FY 2000-2002)SASFAA Default Rates (FY 2000-2002)

STATE FY 2000 FY 2001 FY 2002Alabama 6.9% 6.5% 6.8%

Florida 7.8% 7.1% 7.0%

Georgia 7.1% 6.9% 6.6%

Kentucky 6.5% 7.1% 6.7%

Mississippi 9.0% 7.0% 6.4%

North Carolina 7.1% 5.4% 4.2%

South Carolina 4.9% 4.1% 4.6%

Tennessee 7.0% 6.6% 6.1%

Virginia 5.0% 4.5% 4.4%

National Rate 5.9% 5.4% 5.2%

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Constitution DayConstitution Day

Federal Register Notice published 05/24/05 (correction: 05/31/05) Includes informational resources schools

may use Educational institutions receiving

Federal funding are required to hold for its students an educational program pertaining to the U.S. Constitution on September 17 of each year

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Constitution DayConstitution Day

Applies to all Federal funding, not just funding from ED

Begins with the current fiscal year If September 17 falls on Saturday,

Sunday, or a holiday, Constitution Day shall be held during either the preceding or following week.

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Use of PINUse of PIN

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PIN Web Site Changes

Challenge Question for all users (including FAAs)

Additional security to protect PIN applicants/holders

Effective date: January 1, 2005

Challenge Question/Answer in lieu of PIN to update or change information on PIN Web Site

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PIN Web Site Changes (cont’d)

FSA will disable PINs – After PIN holder

• Makes three unsuccessful authentication attempts and

• Does not select and answer “Challenge Question” in three tries

After there is a 30-month period of inactivity

If there is a match with the “Death File”

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Using a PIN

A PIN – Is part of an electronic signature Provides access to Privacy Act

information

Requestor must be PIN-owner A PIN must be sent to PIN-owner

(email, USPS) A PIN must only used by PIN-owner

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Using an ED-PIN

If ED-PIN compromised, we will – Not Issue that ED-PIN again Deactivate ED-PIN Invalidate documents

• FAFSAs• Promissory notes

Also, see Dear Partner Letter GEN-04-10 (Sept. 2004)

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SystemRequirements

SystemRequirements

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System Requirements Dear Partner Letter GEN-04-08 (Sept.

2004) Minimum and optimal requirements for desktop PC

ISIRs COD Direct Loan

2005-2006 processing All schools use COD Common

Record - XML

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Late

Disbursements

Late

Disbursements

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Mandatory Late Disbursements

A school must offer a Pell, FSEOG, or Perkins late disbursement to a student: Who withdraws and is eligible for a

post-withdrawal disbursement, or Who completes the payment period or

period of enrollment

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Mandatory Late Disbursements

A school may offer a late FFEL/Direct Loan disbursement to a student: Who did not withdraw but ceases to be at

least a half-time student Can credit account, but must provide notice

that student can cancel all or portion of the disbursement

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“Late” Late Disbursement

Disbursements more than 120 days after student ceases to be enrolled

Approval from FSA required See Dear Colleague Letter

GEN-05-07 (April 2005)

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Request for approval must contain: School’s name and OPE ID Contact person’s name, title, phone & fax

numbers, and e-mail address Name and SSN of student (and name & SSN

of parent, for PLUS) Type and amounts of Title IV to be disbursed An explanation of why the disbursement was

not made, including why it was not the student’s fault

“Late” Late Disbursement Procedures

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For Pell Grant include: Award Year Payment period begin and end dates Date student completed the payment

period or withdrew from school

For FFEL and Direct Loans include: Loan type (sub, unsub, or PLUS) Date the loan was certified or originated Loan period begin and end dates


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For FFEL and Direct Loans include (cont’d): Did the student complete the loan period? If the student did not complete the loan

period, on what date did the student cease to be enrolled at least half-time?

Is this disbursement the first disbursement of the loan or is it a second or subsequent disbursement?

Lender’s name for FFEL Award ID for Direct Loan


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To request approval, send a fax to:

COD School Relations Center

Late Disbursement Request

(877) 623-5082

School is notified via e-mail


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Contact Information

Anthony [email protected]

202-502-7652

Documents

Federal Update GASFAA Conference Braselton, GA Anthony Jones Office of Postsecondary Education June 2, 2005