NASFAA Conference Highlights Policy Initiatives, Recommendations and Federal Updates
The first day of the NASFAA Conference kicked off with an orientation for first-time conference attendees, in which NASFAA leadership highlighted the information value of this year’s extensive conference agenda and the unique opportunity for members to take advantage of the experience and the chance to make new friends and establish new connections.
More than 2,500 people convened in downtown Chicago to register for the conference and begin exploring the unique interest sessions, ranging on topics from federal updates on loan servicer agreements to NASFAA’s own initiatives to address proposals to standardize award letter and the effort to get out in front of the next reauthorization of the Higher Education Act.
NASFAA Reauthorization Task Force Listening Session
At a Sunday afternoon session, members of NASFAA's Reauthorization Task Force (RTF) conducted a listening session to gather information from the NASFAA membership about topics that should be addressed in the next Higher Education Act (HEA) reauthorization.
RTF Chair Bonnie Joerschke, NASFAA Chair Elect Ron Day and board members Pat Hurley and Brent Tener heard comments pertaining to the needs analysis formula, net price calculators, cost of attendance as a factor in needs analysis, the elimination of loan proration, delays with IRS transcripts and subsequent re-verification, the benefits of utilizing prior-prior year tax data, institutional cost containment, and student debt levels—among other topics.
The RTF is collecting and analyzing comments from participating aid administrators at listening sessions all across the country and will be using this input to formulate recommendations that will be used to guide advocacy efforts when Congress takes up reauthorization as early as 2014.
Task Force on Award Letters
The NASFAA Award Notification and Consumer Information Task Force conducted an interest session to bounce ideas off members and solicit feedback on the committee’s work on the topic of award letters, discussions and themes that emerged and the final task force recommendations.
The Obama Administration, Congress and the U.S. Department of Education have expressed great interest in the financial aid award letter process, with some proposals calling for the complete standardization of the award letter. The NASFAA Board of Directors commissioned the Award Notification and Consumer Information Task Force to examine best practices in award notification. The task force has developed recommendations to improve or standardize elements of award notifications.
The task force expressed appreciation for the importance of clear, concise and accurate information for students and parents, and recognizes there are ways to improve award letters, but do have concerns about over-prescriptive standardization.
Conference attendees pointed out the differences in award letters by institution type, highlighting the need for flexibility in the award letter format. One member from a community college, for example, noted his institution’s desire to place less emphasis on even federally subsidized loans, since gift aid tends to exceed cost of attendance.
The task force also expressed support for the Department of Education’s new financial literacy tool as a supplement to award letters that provides students and borrowers an opportunity to estimate future monthly loan payment against potential earning and compare those costs between institutions.
Loan Servicing Update
In this session, the Department of Education updated members on Direct Loan servicing, including how servicers work with borrowers, how they address outstanding loan servicing issues, and how they provide updated loan data to NSLDS.
As a part of its initiative to simplify federal student loan borrowing and repayment, the Department has solicited services from not-for-profit entities and Title IV loan servicers to help manage federally-held loans, loans made under FFELP by lenders and subsequently purchased by ED and loans that have more than servicer. The Department aims to maintain all of a borrower’s federally-held loans by a single servicer. This is an ongoing process for ED.
All entities contracted under the ED servicer agreement provide the following services:
- Comply with legislative regulatory requirements
- Educate and inform borrowers regarding the tools and options available to assist them in the management of their student loans
- Offer multiple repayment options tailored to borrower preferences (i.e. online payments, ACH, check, etc.)
- Provide self-service tools for borrowers and options to receive bills and/or correspondence electronically
- Offer dedicated services to schools to help manage cohort default rates
FSA’s loan distribution engine will allocate new loans to the Federal loan servicers upon origination based upon the percentage of loans each entity is prescribed. At that point, the servicer will correspond with the borrower. Borrower can be referred to NSLDS to identify their federal loan servicer.
The Department will transfer existing Direct Loan borrower accounts currently assigned to the Direct Loan Servicing Center (ACS) to not-for-profit servicers. Those transferred loans will belong to borrowers who have no loans in an in-school or grace period. The servicers are required to notify borrowers of the transfer when it occurs.
FSA has also identified capitalization scenarios that were applied inconsistently between Direct Loan and the FFEL portfolio (for the federally-held loans), and has documented its preferred business practice to standardize the capitalization rules so that the servicers are consistent. FSA plans to release an electronic announcement with more details on this issue in the near future.
Board of Directors Reception
The day before the conference officially kicked off, the NASFAA Board of Directors gathered to honor all the hard work of NASFAA committee members over the last year.
NASFAA Chair Pam Fowler particularly honored the Access and Diversity Committee and the Training Committee each with the Committee of the Year Award.
The Training Committee worked tirelessly this year to provide fall training materials and the soon-to-be-released monograph on Satisfactory Academic Progress as well as more than 20 conference interest sessions. Meanwhile, the Access and Diversity Committee completed the important task of providing training materials and resources for small and under-resourced schools.
“As chair, I have a whole new appreciation for the work the committees do,” Fowler said.
NASFAA encourages all members to consider volunteering to serve on a NASFAA committee.
“All of the NASFAA committees and volunteers are committed to doing this community proud,” said NASFAA President Justin Draeger. “When we look out over the months and years that are to come, I don’t think we’re going to see a slowdown in some of the legislation and regulatory change that we’ve seen in the last two years. The good news is that it gives us an opportunity to pull together, embrace change, best practices and make things work the best way we can for our students.”