The first round of negotiated rulemaking on ACG and SMART Grants wrapped up on Wednesday with many negotiators frustrated that the Department of Education could not modify its definition of academic year to be more consistent with how institutions measure student progress.

Department representatives repeatedly explained that their hands were tied because the law specifically uses the term "academic year," which is defined as a certain amount of time as measured in both credit or clock hours and weeks. Nevertheless, they encouraged negotiators to suggest any alternatives by which the academic year could be interpreted or additional changes within the limits of the statute, and scheduled an extra early morning session during which all interested parties, including observers, could present ideas.

Negotiators argued that for most institutions, tracking student progress by the Title IV definition of academic year as opposed to using the traditional class standing is an artificial measure that does not represent real progress toward the degree.

Given the definition in the statute, there will always be a disconnect between the "academic year" and most institutions' definition of a year, Department officials conceded. They were hoping to learn how schools have overcome this disconnect and to hear ways schools were trying to attain the data needed to measure progress as defined in the statute. They recognized that it was an uncomfortable fit, but argued that it has to fit.

Department officials also suggested that schools consider the pros and cons of changing their definition of Title IV academic year to more closely match their requirements for advancing in class standing.

Some negotiators said that use of "academic year" did not necessarily mean the Department had to use weeks to measure progress.

One negotiator suggested that the Department use reasonable proxies that would be less burdensome than tracking progress on a week by week basis. It was suggested that there was a reasonably well accepted definition of what a credit hour is, so there should be a way to equate credits with weeks or hours that a student spends in class. Another negotiator suggested that the Department use previous guidance (Dear Colleague Letter GEN-06-18), which gives institutions a limited option for equating a certain number of credits to a certain number of weeks of instruction, and make it part of the regulations under negotiation. GEN-06-18 only provides this flexibility for the first two years of the programs.

Transfer Students

Negotiators spent some time discussing the complexities that transfer students brought to the grant program, and the Department's current requirement that institutions calculate a GPA using grades from the prior institution for accepted transfer credits.

Negotiators brought up unique situations that would complicate current methods of determining eligibility. For example, military students who don't get grades but are likely eligible for Pell Grants make the transfer GPA issue more complicated. In addition, pass/fail grades and credits earned from lifetime experience affect a student's eligibility. Department officials noted that pass/fail courses and lifetime experience were not used to calculate the GPA, but some negotiators pointed out that some institutions offer a year-long pass/fail option and that students with lifetime experience credit, Advanced Placement (AP) or International Baccalaureate (IB) credit may not have any grade point average (GPA).

Department officials entertained the possibility of retroactive eligibility based on grades earned at the receiving institution. They also brought up the possibility of calculating a pseudo GPA for special situations.

Some negotiators were adamant that the receiving institution have sole authority to determine the student's GPA.

Timing of GPA Calculation

Department officials asked if there should be changes to the time period used to calculate GPAs for SMART Grant eligibility. They contended that the time period should be more frequent than annually.

There were a variety of reasons that an annual calculation makes more sense, according to negotiators. They said that if the GPA were calculated annually it would give students, especially those who have to take more than one difficult course in a single semester, some forgiveness to offset a semester with a abnormally bad GPA. They argued that the current regulations place undue stress on students, their particular classes, and the professors they might have, and that annual assessment would still follow the intent of the law, which encourages students to get good grades and make good progress. Negotiators also said that the Department should provide some flexibility for institutions to provide some exceptions for students with exceptional circumstances that affect their GPA. Department officials said they were looking for ways to provide that flexibility within the parameters of the statute.

Previous and Dual Enrollment

The Department was commended for changing regulations to ensure that high school students enrolled in college courses and/or taking AP/IB courses for college credit would still be eligible for ACG awards.

Negotiators expressed concern that students in "early college" programs would not be eligible for ACG awards. The Department assured negotiators that students are eligible upon enrollment in college if they were not classified as "regular students" when taking college coursework while still in high school. Negotiators urged the Department to clarify this point in the regulations.

SMART Grant Eligible Majors

One negotiator noted that language majors on some campuses were coded as geographical area studies and not the language major. The Department suggested that those codes be changed to make them eligible, but the negotiator argued that this resulted in the Department intruding on how the campus organized majors.

Negotiators said there should be a process for institutions to apply for majors to be eligible. They also said that there was no process set up for the possibility of majors being taken off the list of eligible majors.

Some expressed concern that some careers, like teaching and nursing, were not eligible majors. Countering that concern were observations that those fields would have been specified had Congress intended to include them, and that other existing programs covered health fields.

Negotiators suggested that institutions needed additional flexibility because some don't allow students to declare a major in time in time to qualify for SMART Grants. Some campuses are concerned that if they say a student is giving every sign of entering a major that qualifies, but the student changes majors, the institution will be liable, according to one negotiator. There was some concern that this might result in an audit of the institution.

Some negotiators asked for an approved procedure so institutions can ensure they do what is required to avoid an audit. This suggestion raised some concern that this would cause the Department to prescribe to institutions how to determine a pre-major track, boxing institutions into only one way of determining this. Other suggestions included the Department providing clarification about what would provoke an audit and examples of inappropriate disbursement due to false determination of a pre-major track.

Monitoring Disbursements

The negotiated rulemaking session concluded with representatives from the Office of Federal Student Aid (FSA) asking what negotiators would like to see from the Department to help monitor ACG and SMART Grant disbursements.

FSA officials said that institutions would be able to monitor disbursements through COD, NSLDS, ISIR and Transfer Monitoring.

Negotiators asked FSA officials if they could track reasons that students were denied disbursements and ways that students lost eligibility to help assess the programs. FSA officials said they had not done this because it was not crucial to getting the program going, but that it was a good idea and they would look into it.

FSA officials also said they were planning to monitor students' remaining eligibility as dollar amounts and in percentages. Finally, they invited ideas at any time to help them improve the system.

Click here for coverage of the first day of ACG/SMART Grant negotiated rulemaking.

By Haley Chitty
NASFAA Assistant Director for Communications

Posted 02/12/07 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.