U.S. Department of Education officials updated NASFAA Conference attendees about recent and future changes to the federal student aid programs at the closing session on Wednesday.
The Department's Chief Operating Officer Bill Taggart expressed his gratitude to all financial aid administrators for their work to implement significant changes to the aid programs. Taggart and other Department officials repeatedly thanked the financial aid community for their hard work that resulted in a relatively smooth transition to 100 percent Direct Loans.
"Thank you for your service," Taggart said. "With your help, we're funding America's future one student at a time."
The Department's director of forecasting and policy analysis for the Office of Postsecondary Education, Dan Madzelan and director of Policy Liaison and Implementation for the Office of Federal Student Aid, Jeff Baker provided a summary of the goals the Department is currently working to accomplish.
Program Integrity Notice of Proposed Rulemaking
Department officials repeatedly encouraged the financial aid community to comment on proposed rules to address program integrity issues so the Department could provide the best possible regulatory language. Department officials also asked members to comment on appropriate effective dates for various provisions when they submit comments. Comments on appropriate effective dates should take into the consideration the time needed for various parties, such as accrediting agencies, to prepare for implementation.
NASFAA has provided multiple summaries of various sections of the NPRM and a guide to responding to the NPRM. NASFAA has also held a webinar and will present another webinar on July 27.
Madzelan said the Department was very close to finalizing the additional proposed rules for the gainful employment issue.
Two Pells
Baker said the Department understood that administering the two Pells provision was not easy and he compared implementing this modified Pell to implementing the ACG/SMART Grant programs. He explained that the Department crafted the best regulatory language it could given the framework provided by the law. He said the Department plans to issue another Dear Colleague Letter in the near future on this subject.
DL Transition
Baker reported that the switch to Direct Lending has gone relatively smoothly despite some bumps. The Department's conservative estimates show that nearly all schools have either disbursed direct loans or are ready to disburse a direct loan.
"I think we'll meet the commitment to ensure that no student or parent will go without a loan," he said.
During the conference, a rumor circulated that the Department was having issues with the COD server in the eastern region. A Department official explained that the rumor was due to inaccurate information distributed by some misinformed Department representatives. The official said that there are some search, logging, display and link issues that the Department will have fixed by July 27. Department officials sympathized with aid administrators' frustration with problems they have encountered and said the Department is working hard to quickly resolve any problems.
Default Rates
Baker encouraged institutions to take steps today to ensure students don't default on their loans. The new three-year cohort default rate (CDR) goes into effect in 2014, but it will measure students who are in school today. He said when the new three-year CDR goes into effect dozens and possibly hundreds of schools could face sanctions.
"You have to jump on this now or we could have some serious problems," he said.
Pell Grant Shortfall
Madzelan said that he was confident that every Pell eligible student would receive all the funds they are entitled to in the 2010-11 academic year. Congress is currently working to provide funds to pay down an estimated $5.7 billion shortfall in the Pell Grant Program. Democrat leaders have run into opposition to including it in a supplemental war spending bill, so it is possible the $5 billion will be included in a job-creation bill or in the 2011 annual spending bill.
2011 Budget Request
Madzelan reviewed the Obama Administrations 2011 budget request highlighting areas where the Department will continue to push for change. He noted that the administration would continue to accomplish its goal to make Pell a true entitlement program. The administration did make some progress when Congress directed some mandatory funds to the Pell programs as part of the Student Aid and Fiscal Responsibility Act (SAFRA) that was passed in the Health Care and Education Reconciliation Act (HCERA).
He also said that the administration would continue to advocate for an expanded Perkins Loan program, a provision that was dropped from SAFRA before it was passed. Regarding FAFSA simplification, he said that the Department had done all it could and further simplification would require congressional action. The administration will continue to advocate Congress to act on it's simplification recommendations.
Posted 07/22/10 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit website questions or comments to Web@NASFAA.org.
