Neg Reg Committee Proposes Improvements to the TEACH Grant Program

By Karen McCarthy and Stephen Payne, NASFAA Policy & Federal Relations Staff

As reported last week in Today’s News, the negotiated rulemaking, or neg reg, committee convened to re-write federal regulations on accreditation and innovation, distance education, faith-based entities, and the Teacher Education Assistance for College and Higher Education (TEACH) Grant program ended its months-long work in consensus last Wednesday. This article provides a summary of the TEACH Grant program changes in the consensus package.

Because the group reached consensus, the Department of Education (ED) will publish the agreed upon regulatory language in one or more Notices of Proposed Rulemaking (NPRMs) for public comment. NASFAA expects ED to publish NPRMs in late spring or early summer, and any final rules resulting from the NPRM must be published by Nov. 1, 2019 to be effective on July 1, 2020. Non-federal negotiators requested that ED consider allowing the TEACH Grant final rules to be implemented earlier than July 1, 2020.

The approved recommendations fall into five categories:

  1. Timeline of grant-to-loan conversions

  2. Opportunities to complete teaching service

  3. Communications with recipients

  4. Eligibility for service-clock suspension and service year discharge

  5. Conversion reconsideration

Timeline of Grant-to-Loan Conversions

Under current rules, a grant recipient is required to notify ED within 120 days of graduating or leaving a TEACH Grant-eligible program that he or she has entered service-eligible employment, or intends to complete the teaching service and then again within one year, must certify qualifying employment or intent to complete the service.

For every subsequent year, the recipient must certify before a set deadline completion of a qualifying service year or intent to fulfill the service requirement.

If any of these notifications or certifications are not provided by the deadline, the grant will convert to a loan.

Under the proposed rules, a grant-to-loan conversion will be triggered only by the impossibility of completing the four-year servicing agreement within the eight-year timeframe. Service year certifications will be accepted at any time up to a grant-to-loan conversion, although recipients will be encouraged to submit service-year certifications immediately after the conclusion of each school year. Additionally, recipients will have one year following conversion to provide documentation showing they are satisfying the service obligation to have the loan reconverted to a grant.

Opportunities to Complete Teaching Service

Under current rules, qualifying teaching service may include teaching in a high-need field designated by the state and listed in the Nationwide Teacher Shortage Area list, but not if the teaching service is in a geographic region of a state or in a specific grade level not associated with a high-need field of a state designated in the nationwide list as having a shortage of elementary or secondary school teachers.

Under the proposed rules, qualifying teaching service may include teaching in a high-need field designated by the state and listed in the nationwide list, without any exceptions.

Current rules allow teaching service to qualify if the field was designated as high need when the recipient began teaching in that field, but subsequently lost that designation.

The proposed rules would expand this for teaching service performed on or after July 1, 2010, to also allow teaching service to qualify if the field was designated as high need when the recipient signed the Agreement to Serve or Repay, but subsequently lost that designation.

Proposed rules would also provide greater opportunity for recipients who withdraw from their TEACH-eligible program to complete their teaching service. Current rules start the eight-year service clock upon withdrawal. Under proposed rules, if a withdrawn recipient re-enrolls, the eight-year service clock would be reset and would start again when the recipient ceases enrollment in the new program.

Communications With Recipients

The sub-committee proposed several new provisions aimed at improving transparency regarding TEACH Grant recipients’ service completion status, including:

  • Changing the name of the service agreement from “Agreement to Serve” to “Agreement to Serve or Repay.”

  • Adding information to counseling requirements about voluntary grant-to-loan conversions to limit interest accrual.

  • Adding information to counseling requirements about the new reconsideration process should their grant be converted to a loan.

  • Adding an annual notification by ED that includes the number of accepted service years and the number of remaining service years required, how to request a service-clock suspension, and the potential interest accrual should a grant convert to a loan.

  • Adding a notification by ED, at or about 90 days prior to loan conversion, of the need to submit documentation by a specified date.

  • Adding a notification by ED after a grant-to-loan conversion, providing counseling similar to loan exit counseling to make the recipient aware of loan repayment options and borrower benefits.

Eligibility for Service-Clock Suspension and Service Year Discharge

The proposed rules would add the following circumstances as eligible for service-clock suspension and in some cases, service year discharge:

  • Residence in a federally declared disaster zone.

  • Military spouse circumstances, including permanent change of duty station and spouse’s deployment.

  • The time period during which a recipient is completing the state-required teaching certification process.

  • Case-by-case determinations by ED due to exceptional circumstances significantly affecting the operation of the school or the recipient’s ability to teach.

Conversion Reconsideration

The most controversial aspect of the proposed TEACH Grant changes was the creation of a new “reconsideration” process, which would allow recipients to request reconsideration of a grant-to-loan conversion. Although the program and ED have come under fire recently for erroneous grant-to-loan conversions, there is not currently any regulatory provision that allows for reconsideration once a TEACH Grant has been converted to a loan.

Under the consensus language, ED will reconvert the loan to a grant based on documentation provided by the recipient or in ED’s records that demonstrate that the recipient was satisfying the teaching service obligation or that the grant was improperly converted to a loan.

If the reconsideration request is approved, ED will:

  • Suspend the service-clock for the time period during which the grant was wrongly in loan status (and/or count any qualifying teaching service during that time period, if applicable).

  • Refund any payments that were made on the loan that was reconverted to a grant.

  • Update any information reported to consumer reporting agencies while the grant was wrongly in loan status.

Because the group reached consensus, ED will publish the agreed upon regulatory language in one or more NPRMs for public comment. NASFAA expects ED to publish NPRMs in late spring or early summer, and any final rules resulting from the NPRM must be published by Nov. 1, 2019 to be effective on July 1, 2020. Non-federal negotiators specifically requested that ED consider allowing the TEACH Grant final rules to be implemented earlier than July 1, 2020.

 

 

Publication Date: 4/8/2019


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