The new TEACH Grants provide up to $4,000 per year in conditional grant money for students who agree to teach certain high-need subjects in low-income schools. The grants turn into unsubsidized loans for students who do not fulfill the teaching obligation.
Like the ACG and SMART Grant programs, the TEACH Grant program has grade point average (GPA), and program and field of study requirements requirements. Having a system in place to share information with the registrar, admissions, and academic offices will be crucial to implementing TEACH Grants and maintaining administrative capability compliance. In addition, getting these offices on board may help mitigate the considerable administrative burden the TEACH program places on the financial aid office.
Specifically, the institution needs to identify TEACH-eligible programs so the financial aid office will be able to track TEACH Grant recipients in these programs. In addition, some TEACH recipients' GPAs will have to be reviewed every payment period. The financial aid office will have to work with the academic and registrar offices to ensure that campus systems identify which programs are TEACH-eligible and ensure that these programs remain TEACH-eligible.
In order to qualify for TEACH, a student must be in a TEACH-eligible program at the institution. It will be critical for the financial aid office to know if a TEACH recipient leaves the program so the appropriate counseling can be provided within required timeframes. If the applicable draft NPRM agreements are retained in the final rules, TEACH regulations will require recipients who leave school without completing the TEACH-eligible program to inform the Department within 120 days of leaving the school that they are currently fulfilling (or still plan to fulfill) the teaching requirements of the program. It is imperative that recipients remain in contact with the Department. Those who cease contact risk having their grants permanently converted to loans.
Monitoring GPA every payment period
In order to qualify for TEACH, students will either need to score above the 75th percentile on a battery of a standardized admissions test (e.g., SCT, ACT, GRE) once or have a minimum 3.25 GPA for each grant payment period (e.g., every semester, quarter, etc.). The best case scenario for students (and administrators) is the admissions test score because that makes a student eligible for all years of a baccalaureate program, for example, of the student's program and the GPA does not need to be tracked. However, students can become eligible with a 3.25 or higher GPA (first year students use their high school GPA), but this GPA needs to be tracked every payment period after the first year. This can be an additional burden for many schools that track satisfactory academic progress on an annual (rather than a payment period) basis. The financial aid office will ultimately be responsible for ensuring the student has the required GPA prior to each payment because this is a Title IV program, but it can reduce this burden by enlisting the admissions and registrar offices to help develop a systematic way to monitor TEACH recipients' GPAs.
So get the word out now that this program is coming and that it will require campus-wide coordination.
Step 2: Identify and inform eligible students
The new TEACH Grants provide up to $4,000 per year in conditional grant money for students who agree to teach certain high-need subjects in low-income schools. The grants turn into unsubsidized loans for students who do not fulfill the teaching obligation.
If your school has already made the decision to participate in the TEACH Grant Program, it is not too early to start identifying TEACH-eligible students. The FAFSA is a good place to start. The Department added a box for students to check if they are interested in TEACH Grants, but that is only the start. The financial aid office will have to work closely with the registrar, admissions, and academic offices to ensure that a student meets all the requirements.
Once you have identified likely TEACH Grant candidates, it is not a bad idea to start informing them about the program now. The complexity of the program and troubling estimates about the large number of TEACH Grant recipients who will fail to complete their teaching obligations suggest that students will need as much information as possible as early as possible. To assist schools in doing this, NASFAA has created a generic informational handout that schools can customize and distribute to likely TEACH Grant recipients.
It is also not too early to think about updating your student aid consumer information materials and Web sites to include the TEACH Grant program, but remember that this information may have to be updated when regulations are finalized. You could begin redesigning material and wait till final regulations are issued before making them public, or clearly explain that your informational materials are subject to change as rules are finalized. The more students know and the sooner they know it, the easier it will be to implement the program regulations at that time.
IMPORTANT REMINDER: You will need to review your TEACH Grant informational materials when the NPRM is issued and again when final regulations are in place... be sure to let your students know that the rules are still in flux and early information could change.
Step 3: Counseling requirements
Perhaps the biggest burden of the new TEACH Grant program is providing the required counseling. If the draft proposed rules become final, institutions will have to ensure that students receive: 1) initial counseling before the first disbursement of his or her first award year grant; 2) subsequent counseling before the first grant disbursement of each subsequent award year; and 3) exit counseling when the student leaves school or ceases to be enrolled in the TEACH Grant-eligible program. While the new initial and exit counseling requirements may be incorporated into the school's existing Title IV loan counseling, all counseling must be in person, by audiovisual presentation, or by interactive electronic means.
Negotiators agreed that counseling requirements should generally parallel current loan counseling processes, although the content and frequency of TEACH Grant counseling would exceed loan counseling.
The Department has indicated it plans to provide support for counseling (like it does for Direct Loans), but for the immediate future it looks like the majority of the counseling burden will fall on schools. When planning counseling, explore counseling resources provided by the Department for the Direct Loan program because the TEACH program is basically a loan forgiveness program turned upside-down, and students are subject to all the terms of an unsubsidized Direct Stafford Loan if the grant is converted to a loan. In addition to the Direct Loan counseling, students must be aware of all the eligibility requirements, and their responsibility to fulfill the teaching obligation and service agreement.
The draft proposed rules provide a comprehensive list of what would need to be covered in initial, subsequent, and exit counseling. You may want to prepare your institution now for the public comment phase of TEACH Grant rulemaking by initiating discussion of those requirements with a view towards formulating your response to the proposed rules.
In addition to the Direct Loan counseling students must be aware of all the eligibility requirements, and their responsibility to fulfill the teaching service agreement.
Step 4: Updating systems
If you begin updating your packaging policies and parameters to incorporate TEACH Grants and to coordinate TEACH with other aid, you will want to develop a disclaimer that warns students that eligibility criteria and award amounts could change once program rules are finalized. Since TEACH is not need-based, the amount of a student's TEACH Grant, in combination with all other student financial assistance, may not exceed the student's cost of attendance. The Department has interpreted the law as allowing a TEACH Grant to replace a student's expected family contribution (EFC), but the amount of the grant that exceeds the student's EFC is considered estimated financial assistance.
In addition, financial aid offices should look for COD operational implementation updates from the Department. These will be distributed through NASFAA Today's News and be posted to NASFAA's TEACH Grant Implementation Resources Web page. You will also need to be in contact with any third-party software providers to make sure they are making the necessary updates to implement TEACH and that your systems will be compatible.
Step 5: Apply to participate
The Department has made it clear that participation in the TEACH Grant Program is optional. Schools will have to apply to participate in the program and must meet participation requirements outlined in the draft proposed regulatory language. The Department indicated that it will be issuing guidance (most likely a Dear Colleague Letter) informing schools of the application process for the new program in the future.
The conditions of institutional eligibility were hammered out by negotiators and are defined in the draft proposed rules, but, again, the draft language could be adjusted, especially once public comment is received in response to the NPRM. Any promises you make to award funds to students should probably be contingent upon your being designated an eligible institution. It wouldn't be a bad idea to talk to your institution's legal counsel about that.
A footnote about default rates
Early estimates of the number of students who will have their grants converted to loans make loan default a significant issue. A conforming amendment to section 668.186 in the draft proposed rules state that students who have their grants converted and then default on their loans will not be included in the calculation of an institution's cohort default rate (CDR), but it remains unclear how these students will be separated from other students.
Unfortunately, the Department said this was an operational issue and it would be taken care of on the back end, so there is no language in the draft proposed regulatory language addressing this process. NASFAA has no reason to believe that the Department will not separate these students so they don't negatively impact an institution's default rate, but schools' default management teams should ensure that their CDR accurately reflects the correct student borrowers.
By Haley Chitty
NASFAA Assistant Director of Communications
By Joan Berkes
NASFAA Senior Associate for Professional Assessment, Training, and Regulatory Assistance
By David L. Futrell
NASFAA Assistant Director for Professional Assessment, Training, and Regulatory Assistance
Posted 03/04/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.
