1. Michigan Association of Student Financial Services Administrators Federal Update May 23, 2006 Gail McLarnon United States Department of Education

2. MASFSA Federal Update FY 2006 Final Appropriations Higher Education Reconciliation Act of 2005 President’s FY 2007 Budget Request HEA Reauthorization Dear Colleague Letters & Federal Register Notices

3. FY 2006 Final Appropriations Public Law 109-148 -- Department of Defense Appropriations Act, 2006 Emergency Appropriations for Hurricane Education Recovery 1% Government-wide Reduction of FY 2006 Discretionary Appropriations Public Law 109-149 -- Departments of Labor, HHS, and Education, and Related Agencies Appropriations Act, 2006

4. Final FY 2006 Program Budgets (dollars in thousands) * Includes shortfall **

5. HERA – Higher Education Reconciliation Act of 2005 Deficit Reduction Act of 2005 – P. L 109-171 Conference Report Passed House on December 19, 2005 – 212-206 Conference Report Passed Senate on December22, 2005 in slightly different form – 51 to 50 House Passed Senate’s Version on February 1 President signed into law February 8, 2006

6. Budget Reconciliation—Key Higher Education Provisions Authorizes “Academic Competitiveness Grants” $750 to first-year undergrads at 2- and 4- year schools who complete rigorous high school curriculum $1,300 to second-year undergrads at 2- and 4-year schools who complete rigorous high school curriculum and earn at least a 3.0 GPA as 1 st year undergrad

7. Budget Reconciliation – Key Higher Education Provisions Authorizes National “Science and Mathematics Access to Retain Talent (SMART)” Grant Program $4,000 to 3 rd and 4 th year undergrads at 4-year schools with at least a 3.0 GPA who major in physical, life, or computer sciences, mathematics, technology or engineering or a foreign language critical to national security Both programs are funded and will be operational for the 2006-2007 award year

8. Budget Reconciliation – Key Higher Education Provisions Effective July 1, 2007: 1 st and 2 nd year Stafford loan limits increase to $3,500 and $4,500, respectively Effective July 1, 2007, $12,000 loan limit for grad/professional students Authorizes PLUS Loans for graduate and professional students

9. Budget Reconciliation – Key Higher Education Provisions Provides for a 3-year military deferment for all title IV borrowers applicable to loans made on or after July 1, 2001 Reduces from 12 to “9 payments made within 20 days of due date” to successfully rehabilitate and sets GA collection costs at 18.5% Reinstates expired multiple disbursement and 30-day delay waivers

10. Budget Reconciliation – Key Higher Education Provisions Makes active duty military independent Clarifies that loss of eligibility only for drug-related offenses while enrolled Modifies need analysis formula and expected family contribution Modifies distance education rules

11. Budget Reconciliation – Key Higher Education Provisions Limits direct disbursement of FFEL loans for students studying abroad Requires that Federal Direct Loan repayment plans, other than income contingent, be consistent with FFELP Provides for false cert discharge for victims of identify theft

12. Budget Reconciliation – Key Higher Education Provisions Makes permanent Taxpayer-Teacher Protection Act provisions relating to increased loan forgiveness amounts and provides loan forgiveness for “competent” private school teachers Makes permanent Taxpayer-Teacher Protection Act provisions eliminating 9.5% floor loans and eliminates “recycling” of most tax-exempt bonds

13. Budget Reconciliation – Key Higher Education Provisions Consolidation Loans – Retains single holder rule Eliminates spousal consolidation Eliminates in-school consolidation Limits consolidation from FFEL to Federal Direct Loan Program Requires same terms for FFEL and Federal Direct consolidation loans Maintains current fixed interest rate for consolidation loans

14. Budget Reconciliation – Key Higher Education Provisions Retains 6.8% fixed Stafford interest rate PLUS interest rate set to fixed 8.5% rate Phases down FFELP Stafford origination fees to 0% by 7/1/2010 Requires deposit of 1% default fee into GA’s Federal Fund Phases down Federal Direct Loan origination fees to 1% by 7/1/2010

15. President’s FY 2007 Budget Request Title IV Program Budgets Appropriations * President's FY 2007 Budget Submission

16. President’s FY 2007 Budget Request Title IV Program Budgets Aid Available * President's FY 2007 Budget Submission

17. President’s FY 2007 Budget Request Federal Pell Grant Program Proposals Maximum award for 2007-2008 remains at $4050 Year-round Pell Grants Eligibility limited to equivalent of 16 semesters Tuition sensitivity award rule

18. President’s FY 2007 Budget Request Campus-Based Programs Proposal No proposed changes for FSEOG and FWS Programs Perkins Loan Program No funding for Federal Capital Contribution or Loan Cancellation Recall Federal portion of loan repayments Work with Congress on the future of the program

19. President’s FY 2007 Budget Proposal No changes to FFEL and Direct Loans No funding requested for LEAP GEAR UP Upward Bound Talent Search Byrd Honors Scholarship

20. Higher Education Act Extension Legislation Higher Education Extension Act of 2005 – P.L. 109-150 Extends the HEA through March 31, 2006 Higher Education Extension Act of 2006 – P. L. 109-212 Extends the HEA through June 30, 2006

21. HEA Reauthorization? House Education Committee now chaired by Rep. McKeon (R-CA) Reauthorization provisions not contained in reconciliation will comprise reauthorizing legislation House passed H.R. 609 on March 30 Senate has yet to act

22. Perkins Loan Program Reauthorization Proposals H.R. 609 – passed the House on March 30 by a vote of 221-199 Federal Perkins Loan Program Reauthorizes the Perkins Loan Program Raises Undergrad/Grad loan limits $5,500/$27,500 -- Undergraduate $8,000/$60,000 -- Graduate Eliminates “written” forbearance request

23. Perkins Loan Program Reauthorization Proposals H.R. 609 – Federal Perkins Loan Program Decreases consecutive monthly payments required to rehabilitate from 12 to 9 Allows for 100% cancellation for Military service in areas of hostility Requires Secretary to authorize compromise repayment on defaulted loans

24. Perkins Loan Program Reauthorization Proposals S. 1614 – Federal Perkins Loan Program Perkins Loan Program is reauthorized Eliminates “written” forbearance request Removes “defense of infancy” as borrower defense against repayment

25. Perkins Loan Program Reauthorization Proposals S. 1614 – Perkins Loan Program Proposals: New Cancellation Provisions Expands Head Start Cancellation to Include Full-time Staff in Pre-K or Child Care Programs Faculty Members of Tribal Colleges Librarians in Low-Income Schools/Areas Speech Therapists in Low-Income Schools

26. Hurricane Legislation and Guidance Pell Grant Hurricane & Disaster Relief Act (Pub. L. 109-66) Student Grant Hurricane Disaster Relief Act (Pub. L. 109-67) Waives repayment of Pell & TIV grants for Hurricane-related withdrawals Dear Colleague Letter GEN-05-07 (Pub. 11-09-05)—Waiver guidance

27. Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-09 (Published May 11, 2006) – Eligibility for Title IV Program Assistance for Victims of Human Trafficking HHS must certify an individual as a victim of human trafficking & issue certification/eligibility letter FAA must confirm HHS certification

28. Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-04 (Published April 5, 2006) Process and operational information on the Academic Competitiveness Grant ED notifies applicant and applicant’s school of potential eligibility Website listing “rigorous” curriculum provided to applicant School obtains appropriate documentation and submits payment records to ED

29. Recently Published Dear Colleague Letters Dear Colleague GEN-06-04 (cont.) Process and operational information on National SMART Grant ED will publish list of eligible majors School has information needed to identify Pell-eligible applicants who are majoring in designated subject area School establishes eligibility/submits payment information

30. Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-06 (Published May 2, 2006) – Provides a list of academic majors eligible for the National SMART Grants for the 06-07 award year Dear Colleague Letter GEN-06-08 (Published May 3, 2006) – Additional implementation guidance for ACG and National SMART Grant Programs

31. Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-05 (Published April 27, 2006) – Changes made by the HERA to: Student and Institutional Eligibility Student Assistance General Provisions

32. Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-02 & FP- 06-01 (Published March 10, 2006)— Enactment of the Higher Education Reconciliation Act of 2005 ("the HERA"), Pub. L. 109-171 – Revised March 14, 2006 Topics that affect institutions/borrowers and lenders/guaranty agencies

33. Recently Published Dear Colleague Letters Dear Colleague Letter FP-06-05 (Published April 25, 2006) – Promissory Note Addenda & Revised Plain Language Disclosures for FFEL Program Loans Guidance on awarding Federal PLUS Loans to Graduate and Professional Students

34. Recently Published Dear Colleague Letters Dear Colleague Letter FP-06-03 (Pub. March 17, 2006) – Federal Family Education Loan Consolidation Loans Reiterates and confirms the Department's position that, beginning April 1, 2006, it will enforce the single holder rule in the making of FFEL Consolidation Loans.

35. Recently Published Dear Colleague Letters Dear Colleague Letter GEN-05-15 Reaffirms & clarifies Perkins borrowers must provide services exclusively and directly to “high risk children from low-income communities” to receive cancellation 05-06 Handbook corrects definition of high- risk children: “Individuals under the age of 21 who are low-income OR at risk of abuse or neglect, have been abused…..”

36. Recently Published Federal Register Notices January 18, 2006 – Federal Register Notice inviting comments on renewal of FISAP Dear Colleague Letter CB-06-06 (Pub. March 30, 2006)—DRAFT FISAP January 25, 2006 – Federal Register Notice inviting comments on renewal of FFEL/DL/Perkins Loan Total and Permanent Disability Discharge Form

37. Recently Published Federal Register Notices February 14, 2006 – Federal Register Notice inviting comment on renewal of the Federal Perkins Loan Program Master Promissory Note February 21, 2006 – Federal Register Notice inviting comment on the renewal of the Federal Perkins Loan Program Assignment Package

38. Perkins Loan Program Management Issues Federal Perkins Loan Assignment Package (forms and instructions) expires June 30, 2006 OMB Clearance process will propose: Retention of MPN disbursements records for provision to ED, if needed, for enforcement after assignment Elimination of requirement to renew a judgment before assignment Submission of e-signature authentication process for electronically-signed prom notes

39. Perkins Loan Program Department of ED Contacts Assignment John.R.Adams@ed.gov Campus-based Operations FISAP – Sherlene.McIntosh@ed.govSherlene.McIntosh@ed.gov Liquidation -- Rhonda.Herbert@ed.govRhonda.Herbert@ed.gov Low Income Directory – Pamela.Wills@ed.govPamela.Wills@ed.gov Policy: Gail.McLarnon@ed.govGail.McLarnon@ed.gov Brian.Smith@ed.gov Policy/Operations: Donald.Watson@ed.govDonald.Watson@ed.gov

40. Perkins Loan Program Department of ED Contacts NSLDS: Pam.Eliadis@ed.govPam.Eliadis@ed.gov Sue.Barnette@ed.gov Permanent & total disability assignments: Jennifer.Ryder@ed.govJennifer.Ryder@ed.gov Policy/Operations: Donald.Watson@ed.gov Donald.Watson@ed.gov