Neg Reg TEACH Grant Subcommittee Focuses on Recipient Eligibility, Program Administration, Application Procedures

By Allie Arcese, Sr. Director of Strategic Communications & Engagement

By Allie Bidwell, NASFAA Senior Reporter

A subcommittee of higher education stakeholders convened to propose changes to the Teacher Education Assistance for College and Higher Education (TEACH) Grant program began its work last week with two days of discussion focused on changes intended to clarify portions of the regulation, amend certain requirements, and prevent grants from erroneously being converted into loans.

The subcommittee met last Thursday and Friday, and began by discussing changes to the scope and purpose of the TEACH Grant program. A representative from the Department of Education (ED) said the proposed changes—already laid out in draft regulatory language ED distributed before the first session—are intended to reduce grant-to-loan conversions, which ED has recently come under fire for, and improve program outcomes.

This subcommittee will present its findings to negotiators in the larger committee—who spent the earlier part of the week debating accreditation issues—and they will discuss the recommendations and vote on the proposed changes. Two other subcommittees on distance learning and educational innovation, and faith-based entities occurred simultaneously.

ED first proposed modifying the scope and purpose for the program regulations to add that in addition to serving in a high-need field in a school that serves low-income students, recipients may also serve as a full-time teacher for an educational service agency. ED also proposed tweaking language in the scope and purpose section to clarify that in exchange for the grant, students must complete the service requirement within eight years of ceasing enrollment in the institution where the student received the grant, adding language to include the institution the student transferred to and completed the program. Committee members suggested adding language to the end of the section stating that the student is required to repay the amount of the grant, with interest, in the form of a loan if the student does not satisfy the service requirements—unless the grant was determined to have been converted in error.

Negotiators also had questions to further clarify the meaning of “ceasing enrollment,” such as how ED would treat students enrolled less than half-time, students who graduated and subsequently enter graduate programs, those who go on maternity leave, or other situations.

With regard to the grant application, ED proposed clarifying the regulatory language to state that a student must complete and submit a FAFSA, and complete and sign the agreement to serve (ATS), which ED proposes to rename the “agreement to serve or repay.” Some negotiators questioned whether an institution could require the student to submit an institutional application in addition to the FAFSA, as a way to help students through counseling. Others expressed concern that doing so may create additional roadblocks that could prevent students from obtaining the grant, but Alyssa Dobson, a financial aid administrator representing four-year institutions, emphasized that any additional application form  would be intended to help students fully comprehend the program requirements and prevent grant-to-loan conversions that could otherwise be avoided. Kyra Taylor of the Legal Services Center of Harvard Law School suggested that ED conduct an annual review of the TEACH Grant website to ensure it is up to date with accurate information, and conduct consumer testing of the website to ensure students understand the requirements.

The subcommittee also suggested adding specific language to the counseling requirements section of the regulation to explain to grant recipients that if they know they will not fulfill their service obligation, they may voluntarily ask their servicer to convert the grant to a loan so they do not accrue additional retroactive interest.

ED in its draft regulatory language also proposed adding a provision that the grant recipient may request a suspension for the period to complete the service requirement if he or she lives in or is employed in a federally declared major disaster area. Taylor also suggested adding a provision to allow suspension if the recipient has submitted a dispute—through a process the group has yet to determine—regarding a qualifying service year, a wrongful grant conversion, or other issues. The group also discussed allowing a suspension to account for the time that elapses while the recipient takes a certification test, including the wait time, if a teacher moves to another state and needs to become certified in that state, for example, or if he or she needs to fulfill certain licensure requirements in order to be considered “highly-qualified.”

The subcommittee discussed how the grant recipient would request the suspension, and suggested there be a time limit given to ED to respond to the recipient with the outcome of the request. Additionally, some suggested adding language to give ED the discretion to grant a suspension for exceptional circumstances.

With regard to discharging the service obligation, ED proposed changing language related to total and permanent disability discharge. ED suggested in its draft language that if the recipient does not meet the requirements of the three-year period for a conditional discharge that the service obligation may be reinstated, the recipient must complete the obligation within the remainder of the eight-year period, and if the grant is later converted into a loan, the recipient would not be required to pay interest accrued during the time period between the discharge and the reinstatement.

The group also discussed at what point and under what conditions a recipient would be obligated to repay the grant. The draft regulatory language specifies that if the recipient has failed to begin or maintain the service requirement in a timeframe that would allow the recipient to complete the requirement, the grant would be converted into a loan. NASFAA’s Stephen Payne suggested that ED generate an annual notice that can be combined with a 30- or 60-day grace period notice before the conversion occurs, a recommendation included in a November NASFAA letter to ED.

The group suggested tweaking proposed language from ED that said ED would notify the recipient of the conversion of the loan after the fact, to instead require ED to notify the grant recipient within a 90- to 120-day window prior to when the grant would be converted, and ask the recipient to provide the required paperwork to reflect any service obligation completed, noting the consequences of not submitting the paperwork. The notice would also include the action ED would take in converting the grant to a loan, including accrued interest and the conditions under which the recipient could request a temporary suspension.

Should the grant convert to a loan, the group also discussed that ED should notify the recipient of loan entrance counseling so the recipient has information on repayment plans, consolidation, Public Service Loan Forgiveness eligibility, and other options.

The subcommittee will reconvene for its second session next month, February 12-13.


Publication Date: 1/22/2019

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