The first round of negotiated rulemaking for the new TEACH Grant Program concluded on Jan. 10. This new program was authorized by the College Cost Reduction and Access Act (CCRAA) and is described in Dear Colleague Letter GEN-08-01. The Department of Education (ED) used this first round of sessions to identify the major issues that require negotiation and to elicit the views of the negotiators. Negotiators who represent school financial aid and business offices identified four areas of major concern that require immediate consideration:

1. Definition of "first year student"
2. Frequency of eligibility determinations
3. Use of the grant in packaging
4. Counseling requirements

ED is now drafting their proposed NPRM language to present to the negotiators for discussion in the next round of sessions, scheduled for Jan. 22-24. To be better prepared for that second round, the negotiators whom NASFAA is assisting would like to hear your opinions on the matters they find most worrisome at this point (other issues may surface with more detail after the second round).

The issues are described below. Please send any reactions, advice, examples, etc., to negreg@nasfaa.org and include "TEACH" in the subject line.

Definition Of First-Year Student

Law says: To be eligible for a TEACH Grant, a student who did not receive a score on an admissions test that is above the 75th percentile must have a grade point average (GPA) of 3.25 (on a 4.0 scale). For a student who "is in the first year of a program of undergraduate education, such grade point average shall be determined on the basis of the student's cumulative secondary school grade point average."

Considerations: There are a number of issues associated with this requirement, but the one of immediate concern is how to define a first-year student. Put another way, at what point should the student's GPA based on college work replace the high school GPA?

The statutory language does not allude to academic year, so we are not constrained by the Title IV definition of academic year, as we are in the ACG and SMART Grant programs. Some possibilities are noted below. Do you have a different suggestion altogether, or some thoughts on why any of the following approaches might or might not work well at your school?

• Should the student's class standing be used (e.g., freshman)?
• Should use of the high school GPA continue regardless of how long it takes the student to complete the freshman year?
• Should the high school GPA be used even for a transfer student who completed more than a year at a prior school but for whom your school accepts fewer transfer credits than necessary to take him or her past first year class standing?
• How should you treat a student whose second year class standing is based on AP, other testing, and/or college credit earned while in high school, but who has no college work earned yet from the postsecondary school which the student is now attending?
• Should first year be limited to the school's academic calendar (e.g., for a quarter-based program, only until the end of the first fall + winter + spring cycle during which the student enrolls, regardless of which term during that period the student actually begins attending)?
• How should transfer students if be treated?
• Should first year be defined as the number of terms encompassed by the school's academic calendar (e.g., for a semester-based program, the first two terms the student attends regardless of when they occur, such as summer + fall, or fall + spring, or spring + the following fall) similar to the borrower-based year in the loan programs)?
• How should transfer students if be treated?

Use of the high school GPA will be further complicated by matters of timing. That is, when will you have a final high school GPA to rely upon? Is it likely to be after you have packaged the incoming freshman, whose admission was based on high school coursework completed to the point of admission, perhaps after only three or three-and-a-half years of high school?

Frequency Of Eligibility Determinations

Law says: It appears that a student who, as part of their admission to the program, achieves a score above the 75th percentile on at least one of the batteries in an undergraduate, post-baccalaureate, or graduate school admissions test is not subject to a GPA requirement [other than whatever the school requires to demonstrate satisfactory academic progress (SAP) under the general student eligibility criteria for any Title IV aid]. In other words, no GPA review is required for purposes of subsequent TEACH eligibility for the duration of the student's program of study. Certain other nontraditional students, such as current teachers, seeking grants for graduate study are not subject to the GPA requirement. For a traditional undergraduate or graduate student who did not achieve a score above the 75th percentile, the question is, how often must the GPA be determined as a grant eligibility criterion?

The law specifies that applications be submitted annually, and that the application provide information necessary to demonstrate that, among other things, the student has the 3.25 GPA, if that criterion applies. So, there appears to be some latitude under the law in deciding the period to which a GPA determination applies.

Considerations:

• Should a GPA determination be good for an award year's worth of eligibility (i.e., the same period of time to which the FAFSA applies)?
• Should, then, a student who is ineligible for the fall remain ineligible for the all other terms in the year even if he or she performs very well academically in the fall and, conversely, a student who is eligible at the beginning of the year remain eligible for the rest of the year regardless of ongoing academic performance?
• Should a mid-year reinstatement process be allowed for students who raise their GPAs, and should such a policy be at the discretion of the school?
• Should an appeal process for mitigating circumstances be allowed similar to that used for SAP purposes?
• Should a 3.25 GPA be required each payment period (e.g., each semester or quarter), as is required for a SMART Grant)?
• How would incompletes, missing or late grades, and other similar situations be treated?
• Should the GPA be determined with the same frequency that the school designates for SAP determinations (which must be at least annually but can be more frequent if the school requires it)?
• Is there some other time period or policy that would make more sense?

Use Of The Grant In packaging

Law says: "The amount of a grant awarded under this subpart, in combination with Federal assistance and other assistance the student may receive, shall not exceed the cost of attendance (as defined in section 472) at the eligible institution at which that teacher candidate is in attendance."

The TEACH Grant requires a service commitment by the student; a grant recipient who does not teach for at least four years, full-time, in a designated high-need area in a designated low-income school within 8 years of graduation, must repay all grant funds received. If the student fails to fulfill that service obligation, the grant funds are converted to an unsubsidized Direct Loan with interest accruing from the date of the grant award. For example, a student who borrowed the maximum $4,000 a year for four years of undergraduate study but who then does not teach as required by the service agreement will have incurred a $16,000 unsubsidized loan in addition to whatever other student loans he or she may have borrowed.

Considerations:

• Should a TEACH Grant be allowed to replace Expected Family Contribution (EFC), as unsubsidized loans may, to the extent that the EFC has not already been replaced by loans?
• Should a TEACH Grant be packaged according to whatever policy is established by the school, just as Title IV aid other than Pell Grant currently is packaged in the order and amounts designated by the school?
• Should a TEACH Grant be regarded as an entitlement, albeit subject to overaward provisions, so that schools must package it ahead of other aid (including FWS and subsidized loans), even though such an approach could cause the student to forego other aid more favorable than the unsubsidized loan the grant would become if the student is unwilling or unable to fulfill the required teaching service?

Counseling Requirements

Law says: Not a blessed thing.

Considerations: This grant will become an unsubsidized loan with interest accruing from when the grant was awarded if the student does not fulfill the teaching requirement. ED is considering sending grant recipients quarterly statements informing them of the interest they would be accruing should the teaching obligation not be met.

• How should the student be made fully aware of both the service requirement and terms of the loan that could be incurred (e.g., should some form of counseling similar to loan counseling be required)?
• How often should the student be reminded of the possibility and consequences of conversion to a loan?
• Who should perform the counseling?
• What part should ED play in keeping the student aware of the terms of the grant?