1. Annmarie Weisman Training Officer Federal Update November 7, 2012

2. For Discussion Purposes Only Topics College Choice Tools studentaid.gov Default Rates Executive Order 13607 Financial Aid Shopping Sheet Regulatory Activity Recent Statutory Changes ATB Pell Duration of Eligibility Grace Period Subsidy Subsidized Loan Limits Verification, etc. Questions & Answers 2

3. College Choice Tools 3

4. For Discussion Purposes Only College Navigator

5. For Discussion Purposes Only College Choice: ScoreCard 5

6. For Discussion Purposes Only Financial Aid Shopping Sheet 6 Institutional Metrics: Graduation rate underStudent Right-to- Know Most recent cohort default rate Median debt for completers Loan repayment information Contact information Cost of Attendance Elements Grant s and Scholarships Work Options Loan Options Other Options Including Family Contribution Student Specific Information: Net price After Grants Custom Message

7. studentaid.gov 7

8. Federal Student Aid Websites

9. Solution: StudentAid.gov

10. For Discussion Purposes Only FSA Social Media Twitter Facebook YouTube

11. Cohort Default Rates

12. For Discussion Purposes Only What is the CDR Calculation? A cohort default rate is the % of the number of the schools FFEL and DL borrowers who enter repayment in one Federal Fiscal Year (October 1 - September 30) who default in that federal fiscal year or by the end of the: next federal fiscal year (2 year rate) next two federal fiscal years (3 year rate) Begins with 2009 cohort

13. For Discussion Purposes Only HEOA Changes Increased monitoring from two to three years Establishes a three-year transition period for sanctions On 9/17/12 - released the FY 2010 2-Year Cohort Default Rates to schools (average = 9.1%) On 9/24/12 - released the FY 2009 3-Year Cohort Default Rates to schools (average = 13.4%) 13

14. 14 2-Year Versus 3-Year Calculation The Numerator is the number of borrowers from the denominator who default within a cohort period The Denominator is the number of borrowers who enter repayment within a cohort period 355 5000.071 or 7.1% 605 5000.121 or 12.1% 5,000 FY-09FY-10 125 230 5,000 FY-09FY-11FY-10 125230250 1 st official 3 year rates released 9/2012

15. Transition Period 15

17. For Discussion Purposes Only 17 GEN-12-10 EA – 6/29/12

18. For Discussion Purposes Only E.O. 13607 Signed April 27, 2012 Designed to ensure information, support and protections put in place for those students enrolled in post-secondary programs receiving federal military educational benefits Schools participating in certain federal military education benefits enter into an agreement/understanding with DOD and VA 6/29/12 EA provides a link to recorded webinar and the executive order 18

19. For Discussion Purposes Only E.O. 13607 GEN-12-10 provides a series of Q & As to address how TIV schools can comply with EO 13607 Standardized cost form – EDs Shopping Sheet Aid Information – provides sample language State Authorization and recruitment – follow existing ED regulations around state authorization, misrepresentation, recruitment and incentive compensation Accreditation – follow accreditation requirements Readmission – follow EDs guidelines for returning service members 19

20. For Discussion Purposes Only E.O. 13607 GEN-12-10 provides a series of Q & As to address how TIV schools can comply with EO 13607 Withdrawals – treat VA and DOD funds similar to R2T4 and nonTIV schools develop refund policy similar to R2T4 Individual education plans – definitions/terms, degree requirements and transfer hour procedures Advising points of contact – basic understanding of benefits and services for military/service and family members and contact information for additional help 20

21. For Discussion Purposes Only 21 GEN-12-12 GEN-12-17 EA – 9/11/12

22. For Discussion Purposes Only Shopping Sheet – 2013-2014 ED developed model format to deliver financial aid information to students - section 484 of HEOA Encouraged to be used by schools starting in 13/14 Designed to be used for undergraduate programs, but can be used for any program Especially helpful for 1 st year students 22

23. For Discussion Purposes Only Shopping Sheet – 2013-2014 Required to be used by schools that agree to comply with E.O. 13607 (principles of excellence) Provide prospective veteran/service member students with personalized form that contains standardized information describing program costs and costs that may be covered by available Federal educational benefits and financial aid 23

24. Regulatory Activity 24

25. For Discussion Purposes Only Loans I Pay as You Earn Total and permanent disability (TPD) Loans II Stand alone Direct Loan regulations FFEL origination elimination Reasonable and affordable payments for defaulted loan rehabilitation 25 Regulatory Activity (Neg Reg)

26. For Discussion Purposes Only Teacher Preparation TEACH Grant Title II accountability and reporting systems Pell Grant Finalization of Summer Cross-Over Interim Rule Fraud Prevention New Neg Reg Process Early in 2013 26 Regulatory Activity

27. For Discussion Purposes Only Pay As You Earn Income Based Repayment (IBR) Plan Statutory - FFEL and Direct Loan Maximum annual payment amount is 15% of discretionary income. Remaining balance forgiven after 25 years. New Law (SAFRA) – Effective 2014 Maximum annual payment amount is 10% of discretionary income Remaining balance forgiven after 20 years. New Borrowers on or after July 1, 2014 27

28. For Discussion Purposes Only Income Contingent Repayment (ICR) Plan Statutory - Direct Loan Only Regulatory defined formula Complex Loan amount and income Remaining balance forgiven after 25 years. Limited take-up rate 28 Pay As You Earn

29. For Discussion Purposes Only Pay As You Earn Plan Repayment Plan Amend ICR regulations to – Reduce maximum annual payment about from 15% of discretionary income to 10% Reduce forgiveness time from 25 years to 20 years Available to more borrowers Negotiated rulemaking concluded in March, 2012 NPRM Published July 17, 2012 Final rule publication date Nov 1. Possible Early Implementation 29 Pay As You Earn

30. Recent Statutory Changes 30

31. For Discussion Purposes Only 31

32. For Discussion Purposes Only Ability-to-Benefit (ATB) Eliminates Title IV eligibility for students without a high school diploma (or equivalent) Recognized equivalent includes: GED State certificate passing State authorized exam State considers same as HSD Academic transcript of successful completion of at least a 2-year program acceptable for full credit toward a Bachelors degree Excelled academically in HS and meets admission policy into at least an AA degree Home schooled students 32

33. For Discussion Purposes Only ATB Exception Students who attended a Title IV eligible program of study prior to July 1, 2012 OR officially registered for a TIV eligible program prior to July 1, 2012 AND later attended that program may continue to qualify under one of the ATB alternatives – Passing an independently administered, approved ATB test Successfully completing at least six credit hours or 225 clock hours 33

34. For Discussion Purposes Only ATB Exception (cont.) Receipt of Title IV aid prior to July 1, 2012 not required to qualify for ATB exceptions School must document student qualifies for use of ATB alternative using NSLDS, transcripts, other documentation from previous school indicating enrollment in eligible program GEN-12-09 - provides a grandfather test and various scenarios to assist determine if a student qualifies for an ATB alternative 34

35. For Discussion Purposes Only 35

36. For Discussion Purposes Only Pell Lifetime Eligibility Used (LEU) Reduces the duration of a students eligibility to receive Pell Grant to 12 semesters (600% - 6 full Scheduled Awards) Applies to all students effective with the 2012-13 award year Calculation includes all earlier years of the students receipt of Pell/BEOG NO grandfather clause 36

37. For Discussion Purposes Only Pell - LEU Add each of the annual percentages of a students scheduled award that was actually disbursed to the student If LEU >500% but <600%, partial eligibility Once LEU reaches 600%, student no longer eligible for Pell May also impact FSEOG eligibility 37

38. For Discussion Purposes Only Pell - LEU If <100% eligibility remaining, handle award like a transfer student Pay up to full amount allowed in first payment period/term Pay remaining balance in subsequent payment periods Do NOT spread out percentage evenly over remaining periods May round cents but cannot exceed 600% 38

39. For Discussion Purposes Only Pell – Scheduled Award Based on the statutory maximum award amount for the year and the students EFC (and COA) Amount student would be eligible for if enrolled FT for a full academic year 2013-14 – Maximum Award = $5,550 If EFC = 0, scheduled award = $5,550 If EFC = 1,000, scheduled award = $4,550 Annual Award is the amount of scheduled award received by the student Consider < FT, < full academic year, R2T4, etc. 39

40. Pell Grant Duration of Eligibility Examples – Students Scheduled Award was $5,550, but only received $2,775 because only enrolled for one semester, will have used 50% of that award years scheduled award Student who was enrolled ¾ time for the entire award year would have used 75% of his scheduled award

41. Pell Duration of Eligibility Calculate the equivalency by adding together each of the annual % of a students scheduled award that was actually disbursed to the student LEU – Lifetime Eligibility Used The example students LEU is 125% of the total 600%. Once LEU reaches 600%, student is no longer eligible. If LEU > 500%, but < 600%, partial eligibility 41

42. For Discussion Purposes Only Declining Pell – DCL GEN-12-18 Students can decline all/part of their Pell awards or return some previously received Pell funds to preserve future eligibility Student cannot return Pell from a prior award year Student must provide a signed, written statement indicating that they are declining/returning Pell funds for which they are otherwise eligible and that those funds may not be available once the award year ends School must submit any required adjustment records for the student to the COD System 42

43. For Discussion Purposes Only 43 GEN-11-16

44. For Discussion Purposes Only Upfront Rebates Elimination of Direct Loan Incentives Terminates repayment incentives (upfront rebate) to encourage on-time repayment of loans Effective for loans 1st disbursed on or after July 1, 2012 Still allows interest rate reduction to borrowers who repay electronically 44

45. For Discussion Purposes Only Grace Period Interest Subsidy Temporarily eliminates the interest subsidy on Direct Subsidized Loans during the six month grace period Applies to new Direct Stafford Loans when the 1st disbursement is made on or after July 1, 2012 and before July 1, 2014 45

46. For Discussion Purposes Only Aggregate Loan Limits If a dependent students parent is denied a PLUS, the student can borrow up to the annual independent loan levels. Additional amounts do not count against dependent aggregate loan limits Amounts able to borrow as dependent student (i.e. 1 st year dependent student can borrow $3,500 – base sub/unsub and $2,000 additional unsub) would still count against dependent aggregate loan limits. Undergrads total aggregate = $57,500 46

47. For Discussion Purposes Only Graduate Students Loan Subsidy eliminated for graduate students* Effective for loan periods starting on/after 7/1/2012 Annual limits unchanged, all unsubsidized ($20,500) *Subsidy still available for preparatory coursework and teacher certification programs 47

48. Subsidized Loan Limitation When a student has received subsidized loans for 150% of the published time of the academic program – The student may not receive any additional subsidized loans, and The subsidized loans received from July 1, 2013 on lose their subsidy Applies to new borrowers on or after July 1, 2013. Special calculation of 150% for transfer students Special calculation for less than fulltime students

49. Subsidized Loan Limitation 150% of the published length of the program 1st instance could be as early as December 2013 because of short-term programs Borrower responsible for interest (new borrowers with loans on or after July 1, 2013) Loans can lose their subsidy

50. Subsidized Loan Limitation FSA will track, calculate, and inform Likely to be codes and comments on ISIRs COD Editing Schools will need to provide program information, including CIP code, length of program, and possibly more Probably as part of COD reporting Starting in 13-14 (possibly only for new borrowers)

51. Verification 51

52. For Discussion Purposes Only 2012-13 Verification Still some tax filers not able to obtain IRS Tax Return Transcripts Guidance on IFAP (EA 2012-11-02) Alternative documentation when tax transcript is not available/cannot be obtained 52 New!

53. For Discussion Purposes Only Verification Documentation 53 Tax Return Transcript Based on initial tax filing Obtained in most situations where IRS Data Retrieval process cannot be used Exceptions – amended returns, identity theft, foreign countries, certain island nations and US commonwealths Electronic Announcement dated 8/21/12

54. For Discussion Purposes Only Verification Documentation 54 Amended Tax Returns 1) a signed copy of an original tax return; OR a Tax return transcript; AND 2) a signed copy of IRS form 1040X Identity Theft 1) a signed copy of the paper IRS income tax return; AND 2) a signed copy of IRS Form 14039 Identity Theft Affidavit OR a signed statement, or police report if applicable

55. For Discussion Purposes Only Tax Filers - Extensions 55 Person is required to file, but obtained extension, must submit: – IRS form 4868 or IRS approval to extend beyond October 15, 2012 – W-2 for each source of employment income – Signed statement by a self-employed individual certifying amount of AGI & US income tax paid for 2011 – When above documentation received, verification is considered complete (disbursements are valid) School may request transcript/IRS DRT when taxes are filed

56. For Discussion Purposes Only 2013-14 Verification Continuing to take small steps towards customized verification Items to be verified will be grouped Individual students ISIR record will indicate which group of items the student must verify 56

57. For Discussion Purposes Only 2013-14 Verification Items Same core FAFSA items as in 2012-13 AGI Taxes Paid Four Untaxed Income Items Education Credits # in Household # in College SNAP Child Support paid 57

58. For Discussion Purposes Only 2013-14 Verification Verification items Retained all items subject to verification in 2012-13 Added two new items High school completion status Identity/Statement of Educational Purpose Federal Register – July 12, 2012 DCL GEN-12-11 58

59. For Discussion Purposes Only 2013-14 Verification Documentation of HS completion status: HS diploma; or Final HS transcript that shows the date of graduation Note: Alternative documentation may be accepted if a copy of an applicants HS diploma or final HS transcript is unavailable (…but consider state and accreditor requirements) 59

60. For Discussion Purposes Only 2013-14 Verification Documentation of HS completion status: Recognized equivalent of a HS diploma General Educational Development (GED) Certificate; State certificate received by a student after the student has passed a State-authorized examination that the State recognizes as the equivalent of a HS diploma; Academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or 60

61. For Discussion Purposes Only 2013-14 Verification Documentation of HS completion status: recognized equivalent of a HS diploma For a person seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and has not completed HS but has excelled academically in HS, documentation from the HS that the student excelled academically in HS and documentation from the postsecondary institution that the student has met the formalized, written policies of the postsecondary institution for admitting such students 61

62. For Discussion Purposes Only 2013-14 Verification Documentation of HS completion status: Homeschooled Transcript, or the equivalent, signed by the parent or guardian, that lists the secondary school courses completed by the applicant and documents the successful completion of a secondary school education; OR A secondary school completion credential for home school (other than a HS diploma or its recognized equivalent) provided for under State law 62

63. For Discussion Purposes Only 2013-14 Verification Documentation of identity/statement of educational purpose Appear in person* and present to an institutionally authorized individual A valid govt.-issued photo ID (e.g., drivers license, non-drivers license, passport); AND A signed statement of educational purpose *If unable to appear in person, must provide an original, notarized statement of educational purpose signed by the applicant 63

64. For Discussion Purposes Only 2013-14 Verification Documentation of identity/statement of educational purpose (cont.) Must maintain, an annotated copy of the identification submitted by the applicant that includes: The date documentation was received; AND The name of the institutionally-authorized individual that obtained the documentation 64

65. For Discussion Purposes Only Verification Tracking Groups Verification tracking groups and Items to verify based on group (effective for 2013-14) 65

66. For Discussion Purposes Only Adjusted Gross Income U.S. Income Tax Paid Untaxed Portions of IRA Distributions Untaxed Portions of Pensions IRA Deductions and Payments * if listed on FAFSA V1– Standard 66 Tax Exempt Interest Income Education Credits # of Household Members # in College SNAP (Food Stamps) * Child Support Paid * Tax Filers:

67. For Discussion Purposes Only V1Standard (cont.) Non-Tax Filers Income Earned from Work # of Household Members # in College SNAP (food stamps) * Child Support Paid * * if listed on FAFSA 67

68. For Discussion Purposes Only V2SNAP Supplemental Nutrition Assistance Program (SNAP-Food Stamps) A statement signed by the applicant/parent affirming that SNAP benefits were received by someone in the household during the 2011 and/or 2012 calendar years* *applicant must obtain documentation from the issuing agency if the school has concerns with accuracy of information 68

69. For Discussion Purposes Only V3Child Support Paid Child Support Paid by applicant/spouse/parent Statement signed by the applicant/parent certifying the a) amount of support paid; b) name of the person who paid the support; c) name of the person to whom support was paid; and d) name(s) of child(ren) for whom support was paid *applicant must provide supporting documentation if the institution has reason to believe that the information provided in the signed statement is inaccurate 69

70. For Discussion Purposes Only V4Custom High School Completion Status Identity/Statement of Educational Purpose SNAP (Food Stamps) Child Support Paid 70

71. For Discussion Purposes Only V5Aggregate High School Completion Status Identity/Statement of Educational Purpose AND All items indicated-Tax Filer (V1) All items indicated-Non-Tax Filer (V1) 71

72. For Discussion Purposes Only New initiative – unusual enrollment Unusual enrollment patterns OIG initiative & FSA Pell runners ( e.g., 5 - 6 schools over 2 years) Are they who they say they are Are they series about their education Not part of verification! More info coming soon C flags with requirement to follow up

73. Resources 73

74. For Discussion Purposes Only Web Resources Studentaid.gov - one source of information for prospective and current students about Federal Student Aid IFAP.ed.gov – library of information with links to laws, regulations, policy updates, announcements, etc. (for professional use) fafsa.gov - FAFSA application filing and information 74

75. For Discussion Purposes Only Help with Title IV Questions For Schools & Other Professionals Research and Customer Care Center (RCCC) 1-800-433-7327 fsa.customer.support@ed.gov For Students Federal Student Aid Information Center (FSAIC) 1-800-4FED-AID 75

76. For Discussion Purposes Only 76

77. For Discussion Purposes Only Contact Information For follow-up questions on this session, contact me at: Annmarie Weisman, Training Officer annmarie.weisman@ed.gov 215-656-6456 To provide feedback to my supervisor, contact: Jo Ann Borel, Supervisor joann.borel@ed.gov 281-758-8122 77

78. For Discussion Purposes Only Evaluation Your attention is appreciated at todays session! To provide feedback to me and my supervisor, please complete an evaluation form. Thank you!!!

79. For Discussion Purposes Only Region III Training Team Greg Martin, Training Officer gregory.martin@ed.gov 215-656-6452 Craig Rorie, Training Officer craig.rorie@ed.gov 215-656-5916 Annmarie Weisman, Training Officer annmarie.weisman@ed.gov 215-656-6456 79

80. QUESTIONS?