Title IV Financial Aid: Shifting the Focus The landscape is changing. Will we? Title IV Financial Aid: Shifting the Focus

Old School Program Eligibility The Rules TTC Strategy Program Eligibility Must have at least 16 credits Maximize student access to Title IV aid. Include all programs with 16 or more credits on our list of Title IV eligible programs.

New School HEA Reauthorization in 2008 Addressed “Program integrity issues”

New Eligibility Rules Programs must: Lead to a degree, or Lead to “gainful employment” Programs must meet accountability standards

Twisting the language “Gainful employment” is now an adjective describing the program’s financial aid eligibility, rather than the potential outcome of the program.

What is a GE program? Certificates and Diplomas that are eligible for Title IV aid. Should lead directly to a specific job Examples: Diploma in Medical Assisting Certificate in Automotive Servicing

What programs are NOT GE programs? Certificates or diplomas that are not eligible for Title IV aid – even if they lead to employment Certificates and diplomas that do not prepare graduates for employment. Example: Pre-nursing Certificate ED isn’t saying we can’t have these programs, just that they aren’t Title IV eligible.

TTC All 87 will be held to the same accountability standards. TTC has 87 Gainful Employment programs. In 2013-14: 858 graduates total. 635 (74%) of these graduates were from 26 programs. 61 programs had 10 or fewer graduates. 44 programs had 5 or fewer graduates. 31 programs had 3 or fewer graduates. 4 had no graduates. All 87 will be held to the same accountability standards.

Accountability – What’s Involved Disclosure Program Eligibility

Disclosure

Disclosure Consumer information Think “Nutritional Facts” Must use ED’s template Intended to be used while “shopping” Must be online and must be included in all promotional materials for the program

Example

TTC Concerns In general, we look good Disclosure affects public perception and student expectations Considerations: Updates due each year in January Low enrollments = variation in on-time graduation and graduate placement rates.

Program eligibility

Preliminary Release Two criteria Debt to Earnings Straight Debt-to-Earnings Ratio Debt-to-Discretionary-Earnings Ratio Program-level Default Rates

Final Release – Friday, October 31 One criteria Debt to Earnings Straight Debt-to-Earnings Ratio Debt-to-Discretionary-Earnings Ratio Program-level Default Rates

Final Release – Friday, October 31 One criteria Debt to Earnings Straight Debt-to-Earnings Ratio Debt-to-Discretionary-Earnings Ratio Program-level Default Rates

Final Release – Friday, October 31 One criteria Debt to Earnings Straight Debt-to-Earnings Ratio Debt-to-Discretionary-Earnings Ratio Program-level Default Rates BUT – it will be disclosed!

Debt to Earnings Ratios Who is included? Graduates only, but must have been a Title IV or private loan recipient. Pell students who did not borrow are included. Graduates who did not receive any Title IV or borrow during their enrollment (e.g. received SCLTA only) are not included. Need 30 qualifying grads in the last two year period, but . . . If they don’t find 30 in two years, they’ll go back four years.

Calculating Debt ED has the federal loan amounts Department of Ed will calculate the average annual loan payment for the cohort. ED has the federal loan amounts We report the dates of program enrollment Will include private loan amounts But these are uncommon Loan payment amortized over 10 years.

Calculating Earnings Department of Ed will acquire mean and median earnings for the cohort from the Social Security Administration.

Calculating the Debt to Earnings Ratios DTE Average annual loan payment for the cohort. Cohort mean earnings OR cohort median earnings (whichever is larger)

Calculating the Discretionary Debt to Earnings Ratios Department of Ed will calculate the discretionary income by subtracting 150% of the poverty guideline for a single person (currently $17,505) from the mean or median cohort earnings.

Calculating the Discretionary Debt to Earnings Ratios DTDE Average annual loan payment for the cohort. Cohort mean earnings OR cohort median earnings (whichever is larger) - $17,505

Debt to Earnings Ratios Pass Zone Fail Debt to Earnings (DTE) ≤ 8% 8% < DTE < 12% ≥ 12% Debt to Discretionary Earnings (DTDE) ≤ 20% 20% < DTDE < 30% ≥ 30% Program is ineligible if It fails any two out of three consecutive years, OR It does not pass any one out of four consecutive years.

What happens . . . When a program is first “Zone” or “Fail”? You cannot add a new program with the same CIP code as a “Zone” or “Fail” program to the list of eligible programs, even if you remove the failing program from the list. Moratorium lasts three years.

What happens . . . When a program is one year from ineligible status? You must: Notify in writing all current students of the program’s status within 30 days of status. Include the program’s status in any marketing materials. Advise any potential students – either verbally or in writing – of the program’s status when they first contact the college.

What happens . . . When a program becomes ineligible? Calculations will be completed in the spring of each year. ED will share their results, and the college has a brief period to challenge the data. Once a program is in ineligible status, the status is effective immediately. You must wait three years before petitioning for the program to regain eligibility for Title IV aid. You cannot add a new program with the same CIP code as an ineligible program to the list of eligible programs for three years.

Concerns – DTE We don’t have access to the earnings data. Interest rates play a huge role in payments. ED used 6.8% in calculating informational rates. Hard to predict which programs will or won’t be included.

TTC Student Debt

What should we consider? Should all programs be eligible for Title IV financial aid? Do students in the program rely on Title IV? Are there alternatives?

What should we consider? What are our processes for awarding student loans? Can we help our students avoid debt? Can we help our students minimize debt?

What data do we have? Number of graduates Number of graduates with loans Amount of graduate debt Estimate of annual payments SOC codes for disclosures Number of jobs in the area Median earnings in the area Estimate of entry-level earnings

What data do we have? Let’s look

Handout

Questions?