U.S. Dept. of Education Update at NASFAA Conference
Senior U.S. Department of Education (ED) officials provided a comprehensive overview of Department higher education initiatives and activities at the closing session of NASFAA’s 2012 National Conference last week.
Conference attendees and NASFAA members can access handouts here >>
Jeff Baker, the Director of Policy Liaison and Implementation at ED’s Office of Federal Student Aid, and David Bergeron, the Acting Assistant Secretary for Postsecondary Education at ED's Office of Postsecondary Education, covered a wide-range of topics from ED’s new financial aid Shopping Sheet to new verification procedures and much more.
Strengthening Consumer Information
Bergeron provided an overview of all the ED initiatives aimed at helping students and parents make informed decisions about higher education. Noting that the College Navigator can be confusing because it is cluttered with information, Bergeron highlighted ED’s new, streamlined College Affordability and Transparency Center (CATC) and the College Scorecard, which will be launched in September. These resources highlight five key metrics:
- net price,
- graduation rates,
- default (or repayment) rates;
- mean and median debt; and
- employment outcomes.
Bergeron also highlighted ED’s final version of the financial aid Shopping Sheet that ED is encouraging institutions to voluntarily adopt for the 2013-14 award year. However, Bergeron noted that institutions that have agreed to the Obama administration’s “Principles of Excellence” for veterans must use the Shopping Sheet for veterans, active military, and their families.
Bergeron noted that the Shopping Sheet was not designed to replace financial aid award letters/offers, but could be used as a “cover sheet” to help students compare student aid packages and college costs. He also said that ED is building a tool to help institutions and software developers implement the Shopping Sheet.
In response to one attendee’s comment that the Shopping Sheet would be tough to implement for non-term programs, Bergeron recognized the challenge of balancing customization with standardization and said ED was wary of allowing too much customization because it would limit comparability. In response to a question about how useful the Shopping Sheet would be for graduate/professional and returning students, Bergeron answered that it is more useful for undergraduate students. While the Shopping Sheet is final for the 2013-14 award year, ED will look to improve it in future years.
Baker reminded financial aid professionals that paper copies of IRS tax returns can’t be accepted for verification, as of July 15. Instead, students must use the IRS data retrieval process or obtain an official IRS tax transcript for verification purposes.
Baker and Bergeron received several comments highlighting that the elimination of paper copies would likely cause confusion for some students and they noted that institutions should be prepared to assist these students. They also noted that institutions should not expect to have the option of using the paper copies next year.
The same core FAFSA items will be subject to verification for the 2013-14 award year, but there are two new items:
- high school completion status
- identity/statement of educational purpose.
Existing core items:
- Taxes Paid
- Four Untaxed Income Items
- Education Credits
- Number in Household
- Number in College
- Child Support paid
ED is creating five verification groups, and each group will be required to verify a different combination of verification items. ED expects the number of applicants required to verify high school completion status and identity/statement of educational purpose to be very small.
Bergeron gave a brief overview of the district court decision that vacated some of the gainful employment regulations due to ED’s unclear rationale for setting the Repayment Rate failure threshold. Because of the interrelationship of the gainful employment requirements, the Court vacated most of the gainful employment regulations, but left the disclosure requirements in place.
Bergeron stressed that although the court vacated most of the regulations, it also upheld ED’s authority to regulate gainful employment (GE) programs.
“We are reviewing our legal and policy options to move forward in a way that best protects students and taxpayers while advancing our national goal of helping more Americans get the skills they need to compete in the global economy,” he said.
He urged schools to work to improve their GE programs by working with employers to ensure that the program’s training meets manpower needs and determine what is needed from program graduates so that graduate earnings can support student and taxpayer investments.
The New StudentAid.gov
Baker gave a quick overview of the new StudentAid.gov website designed to consolidate ED’s multiple websites. The new site:
- Establishes integrated, customer-focused web experience for students, parents, and borrowers
- Simplifies and streamlines FSA’s web presence by consolidating content from 14 websites and retiring 5 websites in first phase
- Launches updated properties on Facebook, YouTube, and Twitter
Regulatory Activities and Initiatives
Baker noted that all volumes of the 2012-13 FSA Handbook have been posted and acknowledged that certain volumes of the handbook are needed by schools before Jan. 1. He said that ED was working “very hard” to issue these volumes earlier. He also reminded attendees that ED extended (for the last time) the deadline to move to SAIG ED Connect version 8.1 to Aug. 5.
Bergeron offered an overview of recent negotiated rulemaking for student loans and teacher preparation. These regulations are aimed at addressing several issues, including:
- “Pay as You Earn” changes to the income-contingent repayment plan
- Total and permanent disability discharges
- FFEL origination elimination
- Reasonable and affordable payments for defaulted loan rehabilitation
- TEACH Grant and teacher preparation issues
He also highlighted several outstanding issues that ED plans to address with more negotiated rulemaking, including:
- Pell crossover rules (interim final rule remains in effect until ED issues final rule)
- Interest subsidy limitations
- Pell Grant fraud
- Disbursement rules
- Campus-based aid issues
- Public Service Loan Forgiveness Technical Updates
One attendee asked if there were any plans to revisit Return to Title IV (R2T4) regulations because they were so burdensome for campuses. Bergeron said that it was unlikely that ED would revise these regulations unless Congress passes new legislation.
Consolidated Appropriations Act
Regarding the new 12 semester limit on Pell Grant eligibility included in the Consolidated Appropriations Act, Baker provided several details. He reminded financial aid professionals that once Lifetime Eligibility Used (LEU) reaches 600%, a student is no longer Pell eligible. If LEU is more than 500% but less than 600%, a student will have partial eligibility for the next award year. He also highlighted that in mid-April ED began sending campuses weekly reports of 2012-13 applicants who have LEUs of more than 450% and emails to students who have LEUs of more than 500%.
Beginning in July the Common Origination and Disbursement (COD) system returns LEU in the common record response, displays LEU on the COD website, and edits and returns warning edits when LEU is near or exceeds 600%. In addition, the National Student Loan Data System (NSLDS) displays students’ LEU and the Central Processing System (CPS) uses comment codes to flag students whose LEU is close to or exceeds 600%.
Baker also said that ED plans to issue guidance in the near future on the temporary elimination of the interest subsidy on Direct Subsidized Loans during the six month grace period.
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