September 5, 2007

Dr. Sophia McArdle

U.S. Department of Education

1990 K Street, N.W.

Room 8019

Washington, D.C. 20006

 

Dear Dr. McArdle:

 

On behalf of the National Association of Student Financial Aid
Administrators (NASFAA), an organization representing financial aid
professionals at approximately 3,100 postsecondary institutions, I am
submitting the following comments and questions on the Academic
Competitiveness and National SMART grant programs NPRM published in the
[Federal Register]{.underline} on August 7, 2007.

We offer a number of comments and questions on the following pages;
however, we must first express our disappointment that the Department
chose not to address two issues in this NPRM.

The first issue involves the eligibility of certificate programs. This
topic was discussed extensively in negotiated rulemaking sessions.
Negotiators offered a variety of options beyond simply all or nothing.
We understand that although the Department admitted that the law could
be interpreted either way, it is a policy decision of the Department to
exclude certificate programs, and so they remain ineligible. We are
troubled not only by the Department's failure to address this issue, but
also by the lack of discussion on this topic in the preamble.

We are also disappointed with the Department's failure to change the
frequency of calculating the SMART grade point average (GPA) which must
be calculated each term rather than yearly. Threading sections 401A(c)
through (c)(3)(C)(ii), the law deems a student eligible "who, for the
academic year for which the determination of eligibility is made... in
the case of a student enrolled or accepted for enrollment in... the
third or fourth academic year of a program... has obtained a cumulative
grade point average of at least 3.0...." As was argued in the
negotiations, the statutory language can just as well be interpreted as
meaning that a GPA for SMART purposes is also determined on an annual
basis for each academic year. Such an approach would cut the
administrative burden with all the attendant timing issues and caveats
regarding missing grades in half for each academic year.

Again, our comments are offered in the spirit of improving and
clarifying the regulatory language to better serve student aid
recipients and their families, improve the administration of the Title
IV loan programs, and meet the administrative needs of financial aid
offices and, if possible, reduce administrative burden on postsecondary
institutions. If the Department has any questions about our comments,
please contact me.

 

Sincerely,

![](media/image1.png){width="3.1868055555555554in"
height="1.2458333333333333in"}

Dallas Martin

President

[Academic Year Progression (Sec. 691.6(a), (b), and (c))]{.underline}

To determine a student\'s academic year for ACG, the preamble and
proposed 691.6(a) say that a school would have to consider a student\'s
attendance in all ACG-eligible programs at that institution only (unlike
current rules that look at the student\'s attendance in all ACG-eligible
programs anywhere). We think this change is a positive
improvement. However, proposed 691.6(d)(1)(i) directs a school to count
all credits that are accepted towards the student\'s eligible program..
Please explain how the proposed language in 691.6(a) would be applied in
the context of 691.6(d)(1). For example, a student transfers from an
associate degree program to a bachelor's degree program at the same
school, but not all credits transfer. How does the school treat the
credits earned in the associate degree program that do not transfer? In
that scenario, how would a student who received no ACG in the associate
degree program (because of part-time enrollment) be treated, versus a
student who did receive first-year ACG funds?

For SMART Grant purposes, an eligible program is defined as one that
leads to a bachelor\'s degree *in an eligible major*. Under this
definition, is a student considered to be in an eligible program only if
he or she has declared or intends to declare an eligible major, or is
the student considered to be in a SMART-eligible program as long as an
eligible major is offered within that program? If the former, do credits
earned while in the third year of a bachelor's program in an ineligible
major fall under 691.6(d)(2)(ii) for purposes of counting or estimating
weeks?

While we appreciate the Department's efforts to provide flexibility in
the ways in which a school may estimate a student's weeks of attendance,
we believe that the benefit of those efforts are lost by the
Department's view that a school must designate only one alternative
method for each academic program. We believe that a school should be
able to apply the alternatives on a student-by-student basis if it
wishes to do so instead of a program-by-program basis.

We are disappointed that there is no method under which weeks can be
associated with AP credits or credits earned while not in an eligible
program. The effect of this absolute prohibition is that a student
cannot use AP or certain transfer credits to advance more quickly in his
or her program should he or she wish to.

We believe that, regardless of how well the Department explains the new
approaches, there will inevitably be confusion over the expiration of
guidance in GEN-06-18. For example, while it may be fairly clear that
the proposed alternatives are meant to replace the assumption method of
the DCL, there is no explicit mention of the guidance regarding the end
of the "fourth" academic year of eligibility. We believe it will be
helpful for the Department to specify what aspects of prior guidance
remain in effect and what specifically expires. Also, until now, the
Department has issued year-specific guidance, such as determining
rigorous secondary school program completion through a
self-certification process; it would be helpful for schools if the
Department would incorporate general principles for compliance with
broad eligibility issues such as these into regulation so schools have a
better basis on which to tool up their annual procedures. These programs
have become very dependent on individual and varied school procedures,
and come dangerously close to interfering with academic purview and
admission policies. To this end, NASFAA recommends that the Department
codify its policy that requires institutions to look only at student who
self-certify their ACG eligibility through the Department's FAFSA
application process.

[Transfer Student (Sec. 691.6(d))]{.underline}

Under proposed Sec. 691.6(d)(3), an estimated number of weeks of
instructional time must correspond to the credit or clock hours accepted
in the same ratio as the weeks of instructional time in the eligible
program\'s academic year is to the credit or clock hours in the academic
year of the student\'s ACG or National SMART Grant eligible program. As
written, 691.6(d)(3) is directive: the school must estimate the number
of weeks based on accepted credit using the formula provided in the
proposed rule.

a\. Is our reading correct that neither the school nor the student has
the right to require an exact accounting of weeks for credits earned at
other institutions?

b\. Application of 691.6(d)(3) is not conditioned upon a particular
payment formula or program type. So, does 691.6(d)(3) encompass transfer
students entering any kind of a program, even nontraditional formats,
for the first payment period at that new school?

c\. After a transfer student's first payment period in a standard term
program at the new school, does the school, for subsequent payment
periods, have a choice between exact accounting and the alternative
designated for the student's program?

d\. Is the transfer analysis in 691.6(d)(3) meant for placing the
student's Title IV academic year upon entry only? That is, for a
continuing student with previously transferred credits, is or can the
alternative method designated for the student's program be applied to
the student's total number of accrued credits including the transfer
credits, or does the school have to apply the alternative method only to
attendance at the current school from entry forward?

For example, a school might have chosen the grade-level alternative as
its standard approach for a particular program; is the transfer analysis
under (d)(3) still a requirement or can the school assume the student
has completed both components of all prior academic years based on his
or her grade level upon entry?

> Here's a specific example. Suppose a student is transferring into a
> SMART-eligible program for which the academic year is defined as 24
> credits and 30 weeks, but 30 credits are required for grade level
> advancement. The designated alternative for this program is grade
> level. The school accepts 48 credits for this student; using the
> transfer formula, 48 credits equates to 60 weeks so the student would
> be starting his third Title IV academic year even though he is
> categorized as a sophomore. Suppose he gets a SMART Grant award for
> that first payment period based on his third Title IV academic year
> status and an eligible GPA. Suppose he only earns 9 credits. As he
> starts his next term (his second term now at the current school) he
> has 57 credits and is still classified as a sophomore. What's his
> eligibility now?
>
> Since the transfer analysis is essentially the credits-earned
> alternative, why can an institution not continue to apply the
> credits-earned approach to that student regardless of the alternative
> otherwise chosen for his program of study?

e\. If a student transfers into a program for which the designated
alternative is terms attended, do you in that case just add weeks
attended at the new school to the calculated weeks derived from the
transfer analysis?

f\. Does 691.6(e)(2) refer to all students except transfers in their
first payment period but including students who transferred but are now
in subsequent payment periods at the new school?

g\. Can the institution to which a student transfers rely on the
previous institution's determination that a program was an ACG/SMART
eligible program if funds were awarded and/or disbursed?

h\. Under the proposed rules, are schools still prohibited from paying
"backwards" if a student's academic year classification changes and the
student has not completely utilized the grant level for the new
classification? With the switch in concept represented by the changes to
691.6(a) and (b), and the fact that a student can never get more than
one grant per level, it seems to us that the previous rule is more
restrictive than necessary.

i\. How are students attending more than one school under a written
agreement treated, both during the period covered by the agreement and
upon returning to their home school?

[Student Request To Determine Academic Year Level (Sec.
691.6(e))]{.underline}

The preamble (p. 44054) states that an exact accounting "would always
preempt any use of the three alternative methods for determining the
weeks of instructional time" and that if the institution performs an
exact accounting for a given student it cannot then apply any of the
alternatives to determine that student's academic year. The proposed
regulatory language at 691.6(e)(3) is even more restrictive; it states
that once an institution ***initiates*** an exact accounting it may not
use an alternative method for that student. We have the following
specific questions on this provision.

a\. Does the regulation refer to an exact accounting just for a given
payment period? Or, once a school uses an exact accounting for a
student, must the school use exact accounting for that student from
there on out, i.e., for all subsequent payment periods as well? The
proposed language is not clear on this point.

b\. Does it matter whether it was the school or the student who
initiated the exact accounting? For example, if the student requests an
exact accounting, does that request apply to the current payment period
determination only or to all future determinations for the student as
well by that school?

c\. Can the student ever rescind his or her request? For example, the
student may have made the request based on a misunderstanding of how
progression works and an exact accounting could cause the student to
lose funding.

d\. If the school is performing an exact accounting for a continuing
student who has credits previously transferred from another school, are
weeks associated with the transfer credits still calculated using the
formula in 691.6(d)(3)?

In addition, regarding the use of exact accounting as the "default"
regulatory method, our staff had differing interpretations of the
regulatory intent concerning alternative determinations of weeks of
instructional time. One view is that, based on 691.6(e)(1), an exact
accounting is always the default method unless you choose to apply an
alternative to a given student. However, if you choose to use an
alternative for that student, your only choice is the one alternative
you designate for the student's program of study. The other view, based
on (e)(2)(ii), is that the proposed rule means that if you designate an
alternative for a program of study, that alternative becomes the default
approach for *all* students in that program and any application of an
exact accounting becomes the exception. Based on these views, we have
the following additional questions.

a\. If a school designates an alternative method of determining weeks
for students in a particular program, does that mean that the school
must use that alternative for all the students in the program unless an
exception is made to use an exact accounting for a given student?

b\. If the answer to (a) is yes, can the school make the choice to use
an exact accounting in that scenario or is it only the student's right
to do so? \[691.6(e)(2)(iii) seems to address only the student's
choice.\]

c\. Are we correct that whichever way is considered the exception (an
alternative or an exact accounting), the school would not have to
document why it used one approach or the other, i.e., either approach is
valid as long as the results of an exact accounting is always used if
performed?

d\. In 691.6(e)(3), can you explain what the phrase "including an
accounting pursuant to paragraph (e)(2)(ii) of this section" means?

e\. If schools can decide on a student-by-student basis which method
(exact accounting or the alternative designated for the program) to use,
can a school decide it will always use the exact accounting method for
certain groups of students within an academic program and always use its
designated alternative for other groups? For example, a school might
want to use exact accounting for any student who has AP or IB credits,
but the grade level alternative for students who do not.

f\. Can you explain why neither the school nor the student can have the
benefit of both determinations (exact and an alternative) before
determining which is actually more beneficial to that student given the
student's unique circumstances? It seems especially onerous to say that
a student who questions the school's determination using an alternative
approach could actually cause a less advantageous outcome by triggering
an exact accounting that must then be used. Counseling a student becomes
impossible because you cannot perform the determination to advise the
student whether or not she should request an exact accounting because,
as the regulation is proposed, once you even initiate the exact
accounting you have to abide by it.

[Alternative Methods for Determining Weeks of Instructional Time (Sec.
691.6(e), (f), (g), and (h))]{.underline}

The three alternative methods for determining the weeks of instructional
time for a student\'s academic year progression are permitted only for
institutions with traditional academic calendar programs. Because these
alternatives would not apply to eligible programs without traditional
academic calendars, an institution would always be required to provide
an exact determination of student academic year progression for these
nontraditional programs.

How does restricting the use of the three alternatives to standard
term-based program formats play out when students cross enrollment
between different formats? For example, a student may take 6 credits
from the standard-term day program, plus 6 credits from a non-standard
term night program.

Further, according to the preamble (p. 44053): "Because these
alternatives would not apply to eligible programs without traditional
academic calendars, an institution would always be required to provide
an exact determination of student academic year progression for these
nontraditional programs." The proposed regulatory language at
691.6(e)(2)(i) accordingly conditions use of any of the three
alternatives on the ***use*** of 691.63(b) or (c), i.e., formula 1 or 2.
We note that this restriction is repeated at proposed 691.6(f)(1) and
(g)(1), but states "may determine payments" under those formulas rather
than "uses" those formulas; further, the restriction is not repeated
anywhere in (h).

a\. Currently an institution that uses formula 3 but could use formula 1
is able to use the assumption method as an alternative to exact
accounting, but formula 2 programs are not. Also currently, formula 1
and 2 schools can use the summer alternative under 691.6(d). The
proposed rule changes these conditions so that formula 2 programs can
use the alternatives but it appears that formula 3 programs that could
use formula 1 cannot use the alternatives. Is that correct?

b\. How would intersessions offered between standard terms affect use of
the alternatives? Currently, if an institution combines the intersession
with one of the standard terms, the program is still considered to be
traditional standard term; is that how you would view the ability to
apply these alternatives?

c\. How would the institution account for weeks attended in
intersessions offered between standard terms under the alternative
methods?

We think that the regulation would be clearer if some of the descriptive
language from the preamble were incorporated into 691.6(f)(1) and
(g)(1). For example, (f)(1) would be easier to follow if "by counting
completed terms" were added before "under the procedures set forth..."
The terms coined for the three alternatives in the preamble
(terms-attended, credits-earned, and grade-level) are helpful handles.

["Grade-level" alternative (Sec. 691.6(h))]{.underline}

To use the \"grade-level\" alternative, an eligible program must qualify
under proposed Sec. 691.6(h)(1)(ii) and (2)(i) by establishing that at
least two-thirds of the full-time students in the program are completing
at least the weeks of instructional time in the academic year for each
grade level completed.

For the grade-level alternative, the preamble states that "at least
two-thirds of the full-time students in the program are completing at
least the weeks of instructional time in the academic year for each
grade level completed." The proposed regulatory language requires that
"at least two-thirds of the full-time, full-year students complete at
least the weeks of instructional time of an academic year while
completing each grade level during the three most recently completed
award years..." However, in using this alternative, no weeks may be
associated with certain credits such as those acquired through AP.

a\. How does a heavy concentration of AP credit for freshmen affect the
\"grade-level\" alternative? For example, let's say that at a particular
school many incoming freshman for a given educational program receive AP
credits. Suppose more than a third of the incoming class progress to
sophomore standing after one semester of attendance because of the AP
credit. How would that school calculate the two-thirds caveat for the
grade-level alternative?

b\. Also relating to AP credit, proposed 691.6(h)(1)(i) requires a
student to have completed "at least the minimum credit hours for the
prior academic years for that program in accordance with this section."
Does "in accordance with this section" mean that AP credits do not count
in that determination?

c\. Are continuing students who previously transferred into the
institution included in determining the two-thirds qualification to use
the grade-level alternative? And how does (h)(1)(i) apply to them? For
example, a student transfers in as a freshman but with enough credit so
that after one term she becomes a sophomore. How is she subsequently
treated under the grade-level alternative?

d\. Section 691.6(h)(2)(ii) states that "for each of the ACG or National
SMART Grant programs, an institution may make a determination under
paragraph (h)(2)(i) of this section on an eligible program basis or an
institutional basis." If the institution makes the determination on an
institutional basis, must it elect the grade-level alternative for all
of its programs, or can it still designate either of the other two
alternatives for some if its programs? \[Also, we note that the preamble
as quoted above implies that the determination has to be made for the
individual program.\]

[Grade Point Average (GPA) (Sec. 691.15)]{.underline}

On p. 44055 of the preamble is the following statement: \"In conjunction
with the proposed changes to 691.6(a), (b), and (c), an institution
would no longer consider a student's GPA from the student's first
academic year in an eligible program at another institution.\" We are
confused by that sentence, both with respect to current practice and as
it describes the proposed rule. Our understanding is that currently a
school would calculate an incoming transfer student's GPA based on the
credits the school has accepted. So, if at least one academic year's
worth of credits have been accepted, the GPA calculated on the basis of
those transfer credits determine a second year student's ACG-2
eligibility. Does the Department currently allow schools simply to take
the prior school's GPA even if there are some credits the new school has
not accepted?

Under proposed 691.15, (f)(2)(i)(A) requires the receiving school, which
does *not* normally use grades from other schools, to use the grades
"**earned**" by the student; presumably that means earned at the school
from which the student is transferring the credit. Under (f)(2)(i)(B), a
school that *does* normally incorporate grades from the accepted
transfer credits must use the grades "**assigned to**" the accepted
coursework. Are we correct that you recognize here that a school under
(B) can have a policy that substitutes grades actually earned at a prior
school with what it considers its equivalent grade?

Under 691.15(f)(2)(ii), the proposed regulation continues to specify
that "If the institution accepts no credit or clock hours toward the
student's eligible program, the institution must consider the student to
be ineligible until the student completes at least one payment period in
an eligible program with a qualifying GPA." First, how can a student be
considered third-year or beyond if no credits were accepted? Second, if
it takes several payment periods to accrue enough credits to be in the
third year, the GPA is still cumulative based on all coursework taken at
the current institution, right? This wording \[in (f)(2)(ii)\] isn't
clear that the GPA is not **for** the most recent payment period, it's
**through** the most recent payment period using grades earned at the
current institution.

[Prior Enrollment (Sec. 691.15)]{.underline}

We appreciate and support the Secretary's continuing efforts to narrow
the impact of this mystifying statutory provision, thereby disqualifying
as few students as possible.

[Documenting Major (Sec. 691.15)]{.underline}

We encourage the Secretary to continue to work with institutions to
provide as much flexibility as possible, recognizing that schools have
long been in the business of academic counseling and monitoring. We hope
that the Secretary promotes policies, including communications with
auditors and program reviewers, that take into account the complexities
of dual majors and related studies, without penalizing a student who the
school accepts as making overall progress in his or her eligible major.

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