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

2. 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.

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

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

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

6. 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

7. 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.

8. TTC All 87 will be held to the same accountability standards.
TTC has 87 Gainful Employment programs.
In :
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.

9. Accountability – What’s Involved
Disclosure
Program Eligibility

10. Disclosure

11. 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

12. Example

13. 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.

14. Program eligibility

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

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

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

18. 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!

19. 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.

20. 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.

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

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

23. 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.

24. 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

25. 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.

26. 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.

27. 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.

28. 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.

29. 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.

30. TTC Student Debt

31. 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?

32. 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?

33. 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

34. What data do we have?
Let’s look

35. Handout

36. Questions?