ISSUE: Provision expires which permits single loan disbursement for enrollment period of one semester/trimester/quarter for schools with default rate less than 10%. [HEA Section 428G(a)(3)]

RECOMMENDATION: Extend current law.

RATIONALE: Expiration of this provision will disadvantage students and increase administrative burden on schools.

ISSUE: Provision expires which waives the requirement for 30-day delayed disbursement for first-time, first-year borrowers. [HEA Section 428G(b)(1)]

RECOMMENDATION: Extend current law.

RATIONALE: Expiration of this provision will disadvantage students and increase administrative burden on schools.

ISSUE: FWS Eligibility for on-campus child care [HEA Section 441(c)(1)]

RECOMMENDATION: Classify child care services provided to campus employees and students as community service.

RATIONALE: The Department maintains that on-campus child care services serving these clients cannot be considered community service unless they are open to all members of the broader community. However, provision of child care services to employees and students not only benefits the FWS workers, but also facilitates community members becoming students and allows the institution to provide quality and affordable child care to the members of the community who happen to be its employees or students.

ISSUE: Use of Federal Work-Study (FWS) funds [HEA Section 443(b)(2)(B)]

RECOMMENDATION: Clarify the conditions under which the Secretary may grant a waiver of the utilization of FWS funds for community service.

RATIONALE: Many institutions have a strong commitment to service and incorporate it into their institutional philosophy and program structure. These institutions often have difficulty meeting the 7% requirement to expend FWS funds on community service. This statutory change is suggested to permit the Secretary to recognize schools who have voluntarily undertaken substantial community service activities on their own initiative, and not because of government’s mandate. In so doing, the Secretary could avoid penalizing these schools that are unable to meet the federal commitment because community service slots are not available for FWS eligible student workers in the community due to the school’s considerable other community service activities.

ISSUE: Regaining Perkins Loan eligibility [HEA Section 464(b)(1)]

RECOMMENDATION: Permit defaulted borrowers who voluntarily make all payments due on past due accounts to regain eligibility for all Title IV funds, not just Perkins Loan funds.

RATIONALE: Students who make efforts to rectify their prior errors should be permitted to start again with a clean slate. At this point, the statute restricts this renewed eligibility to Perkins Loans.

ISSUE: Computer allowance in need analysis [HEA Section 472(2)]

RECOMMENDATION: To clarify that the allowable rental or purchase of a computer may occur before the start of an award year.

RATIONALE: Such a rental or purchase may often occur prior to the start of the academic year for which the machine is to be used. This interpretation is unfair to parents who purchase a computer in June as a high school graduation gift in anticipation of a September college enrollment.

ISSUE: Early adoption of regulations [HEA Section 482(c)]

RECOMMENDATION: Permit early implementation of regulations.

Rationale: This statutory change would allow schools to implement regulatory changes earlier than the beginning of the award year, at their discretion. For example, if final regulations are published by November 1 to take effect the following July 1, schools would be permitted to adopt the regulatory practices months prior to their official effective date.

ISSUE: Non-germane student eligibility requirements [HEA Sec. 484(n), 484(r), and 487(a)(23)]

RECOMMENDATION: Eliminate non-germane student eligibility requirements.

RATIONALE: Federal student financial aid is designed to help low- and middle-income students gain access to college rather than as a mechanism to collect information that does not directly affect Title IV eligibility. The larger issue involves the targeting of low- and moderate-income students to gather this information. Simply by virtue of their need for financial support to attend postsecondary education, these students are forced to reveal non-germane details that students from higher income students are not asked.

ISSUE: 12-hour rule [34 CFR Section 668.2]

RECOMMENDATION: Eliminate the 12-hour rule.

RATIONALE: Current regulations limit the development of educational innovation and restrict educational opportunities.

ISSUE: Period of regained eligibility for students who are originally ineligible [Student Financial Aid Handbook, page 1-3]

RECOMMENDATION: Establish uniform retroactive treatment for ineligible students who regain eligibility within a payment period.

RATIONALE: Currently, an ineligible student who regains eligibility during a payment period is eligible for Pell Grants and campus-based program funds retroactively to the beginning of the payment period. However, the same student is eligible for FFEL or Direct Loans retroactively to the beginning of the enrollment period that may include a previous payment period. This means that a student could have a FFEL or Direct Loan for a payment period during which they are ineligible to receive campus-based or Pell Grant funds. A student should regain his or her eligibility for all Title IV programs at the same time.

ISSUE: Multiple placements of Satisfactory Academic Progress regulations [34 CFR Section 668.16(e), 668.32(f), and 668.34]

RECOMMENDATION: Consolidate the various regulations on Satisfactory Academic Progress in one section.

RATIONALE: With the various provisions relating to Satisfactory Academic Progress located in different sections of the regulations, it is difficult for financial aid administrators to ensure that they are properly following them.

ISSUE: Treatment of Veterans Educational Benefits paid under Chapters 30, 31, 32, and 35 of title 38 and Chapter 1606 (reservist) of title 10 of the United States. [HEA Section 480(b); 34 CFR 673.5(c)(ix)]

RECOMMENDATION: Make the treatment consistent for Veterans Educational Benefits (e.g., Chapters 30, 31, 32, and 35 of title 38 and Chapter 1606 of title 10 of the United States Code) whether they are treated as a resource in the determination of eligibility for campus-based aid, or whether they are excluded from eligibility determination.

RATIONALE: Veterans Educational Benefits listed above must be counted as a resource in the determination of eligibility for campus-based aid yet are not considered when determining Subsidized FFEL or Direct Loan eligibility. Some NASFAA members believe that veterans are excessively penalized by this restriction, as actual benefit calculations are generally not possible and they are subject to retroactive revision. Taxpayer dollars saved on administration/coordination of benefits would most likely offset any increased campus-based aid eligibility.

ISSUE: Disclosures for campus crime [HEA Section 485(f); 34 CFR Sec. 668.46]

RECOMMENDATION: This statute and its regulations should be rewritten with an emphasis on clear, unambiguous requirements and simplified reporting mechanisms.

RATIONALE: Federal campus crime reporting requirements have changed four times since they were enacted in 1990. Both the statute and the regulations are now extremely complex. Even the Department has trouble interpreting what the law requires, and has been known to give institutions erroneous advice. The regulation is a collection of requirements that frustrates the most diligent campus compliance efforts. One major problem with the campus crime disclosure requirements is the complexity of the underlying statutory language. Confusion about some definitions means that some crimes are underreported while others are over-reported. Further, schools are asked to deliver non-student aid related information only to their aid applicants.

ISSUE: Negotiated Rulemaking agenda procedures [HEA Section 492(b)(2)]

RECOMMENDATION: To clarify that non-federal negotiators have the opportunity to negotiate the agenda and regulatory issues as part of the process.

RATIONALE: This statutory change offers clarity in the negotiated rulemaking process. It does not diminish the Department’s rights; they may still withhold consensus on any items suggested by the non-federal negotiators, and thereby stop a particular item from being part of the Neg Reg negotiations.

ISSUE: Inclusion of LEAP funds in the Return of Funds calculation [HEA Section 484B(a)(1)]

RECOMMENDATION: Remove LEAP from the amount used to determine funds to be returned after a student withdraws.

RATIONALE: It is difficult to determine whether state grants actually include LEAP funds. This change ensures that all students are treated equitably.

ISSUE: Leaves of Absence [HEA Section 484B(a)(2)]

RECOMMENDATION: Clarify that multiple leaves of absence are permitted within the statutory timeframe.

RATIONALE: The Department has interpreted the statute as allowing a student only one leave of absence and has created a complex set of exceptions. Circumstances that would cause a student to request such a leave are often repetitive and it is certainly possible that a student may need to request a second leave. The statute is clear that such leaves may not exceed a total of 180 days in any 12-month period, and does not imply any need for regulatory restrictions.

ISSUE: Late disbursement [HEA Section 484B(a)(4)(A)]

RECOMMENDATION: Restore authority for late disbursement discretion to financial aid administrators.

RATIONALE: This recommendation acknowledges that financial aid administrators are in the best position to determine a student's need for funds after the student has ceased enrollment.

ISSUE: De Minimus repayment amounts [HEA Section 484B(b)]

RECOMMENDATION: Authorize a de minimus repayment amount of $100 for students and for schools.

RATIONALE: Recognizing both the necessity of protecting the federal fiscal interest in the instance of students who withdraw after receiving Title IV program funds and the significant administrative costs of institutions, we believe that there is a minimum amount below which either students nor schools should be required to return calculated repayment amounts. We recommend a statutory change to adopt de minimus amounts of $100 in the instance of a student and $100 in the instance of the institution.

ISSUE: Placement of 50% grant protection [HEA Section 484B(b)(2)(C)]

RECOMMENDATION: Determine the grant protection by subtracting one-half of the original grant amount from the amount of grant the student is expected to repay.

RATIONALE: The current ED interpretation simply divides in half the amount of grant the student must repay. We do not believe it was Congress’s intent for the provision to work in this way. The Department’s interpretation provides the least possible grant protection to students.

ISSUE: Withdrawal date [HEA Section 484B(c)]

RECOMMENDATION: Clarify attendance-taking requirements and other issues related to the determination of withdrawal date.

RATIONALE: The statute clearly states that the date of withdrawal is the date the institution indicates that the student withdrew, in accordance with institutional policies. As the Department has imposed a more restrictive definition, a change is needed to reinforce the current statute.

ISSUE: Requirement to take attendance [Dear Colleague Letter GEN-00-24, Q10; and HEA Section 484B(c)(1)(B)]

RECOMMENDATION: Clarify that schools that are required to take attendance are those required to do so by their certification or licensing board.

RATIONALE: The Department has stated that if—in the Department’s opinion—the only way that an institution could meet any agency’s requirements is by taking attendance, the institution must take attendance for that population. This interpretation inappropriately expands the statutory requirement.