# Archived Information

1

1 UNITED STATES OF AMERICA

2 DEPARTMENT OF EDUCATION

3 - - - - - - - - - - - - - -x

4 IN RE: :

5 HIGHER EDUCATION :

6 REGIONAL HEARING :

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8 Sheraton Chicago Hotel & Towers

9 301 East North Water Street

10 Chicago, Illinois

11 Friday, September 24, 1999

12

13 8:30 a.m.

14

15

16 PANEL MEMBERS:

17 JEFFREY BAKER

18 D. JEAN VETA

19 JAMES D. GETTE

20

21

22

2

1 P R O C E E D I N G S

2 MS. VETA: Let me sort of call this

3 session to order. My name is Jean Veta and I\'m the

4 Deputy General Counsel from the Department of

5 Education and also co-chair the coordination of the

6 Department\'s Student Financial Aid Policy along with

7 Diane Rogers, for the Department.

8 And on behalf of Secretary Riley and

9 Deputy Secretary Mike Smith, I want to welcome you

10 all today and thank you for joining us.

11 What we\'re doing in these listening

12 sessions, is really a continuation of the process

13 we\'ve been involved in for some time in terms of

14 talking to the community and undergoing a regulatory

15 review process.

16 And we\'re doing it, really, for a couple

17 of reasons. First of all because we think it\'s a

18 good idea. And as a general matter that we should

19 continually looking at our regulations to see if we

20 could be doing things better.

21 The second reason is because in the recent

22 re-authorization of the Higher Education Act,

3

1 Congress put a provision in there that says we need

2 to submit a report to Congress in October telling

3 them what we have learned as a result of the

4 regulatory review that we\'ve undertaken.

5 And Congress asked us to look at several

6 things in particular. Specifically, are there any

7 regulations that are duplicative or no longer

8 necessary. The second is are there any regulations

9 that are not being interpreted or applied

10 uniformally. The third is are unnecessary burdens

11 being placed on schools through the eligibility and

12 compliance process. For example, is there a need to

13 consider eligibility and compliance issues more

14 simultaneously than we\'re currently doing.

15 Fourth, are unnecessary costs being

16 imposed on institutions because of regulations that

17 were designed primarily for commercial and business

18 enterprises. And finally, are there any regulations

19 affecting public and private colleges and

20 universities and preparatory schools that receive

21 less than \$200,000 in Title Four funds each year that

22 could be improved, stream-lined or eliminated.

4

1 Now, the way we\'ve gone about these

2 listening sessions is kind of two fold. First we

3 started out with four sessions in Washington were we

4 focused on specific topics. One session was on

5 guarantor and lender issues. The second session was

6 on other loan issues. The third session was on

7 program and student eligibility issues. And then the

8 fourth session was on institutional eligibility

9 issues.

10 And in addition to that, the second prong

11 of our approach has been to conduct these regional

12 meetings. We held one in Atlanta. We\'re holding one

13 here in Chicago today. And then we\'ll be doing one

14 next week in San Francisco. Again, to open it up to

15 colleges, universities, preparatory schools,

16 students, lenders, whoever it may be who couldn\'t

17 make it to Washington but may find it more convenient

18 to come to one of these regional sites.

19 So, what we\'re hoping to accomplish as a

20 result of this regulatory review process is first to

21 come up with an inventory, if you will, of regulatory

22 suggestions. Suggestions that you all think we

5

1 should consider. And once we do that we\'ll need to

2 figure out what next steps are. And our hope is that

3 we won\'t do those next steps in a vacuum. But rather

4 that the dialogue with the community will continue

5 beyond today.

6 So, that\'s where we\'re coming from. I\'d

7 like to introduce my two colleagues. Jim Gette is

8 counsel in the Office of the General Counsel. But

9 also in this last round of negotiated rule making

10 served as the federal negotiator for one of the

11 committees. In particular, the committee that dealt

12 with loan issues.

13 My other colleague is Jeff Baker who is

14 from our Office of Student Financial Assistance. And

15 Jeff has been involved for a number of years in

16 various rules, regulations and policies that the

17 Department puts out. Also is instrumental in the

18 development of those things as they relate to

19 students financial aid.

20 And as I said, we\'re really here to hear

21 from you all. Given the size of the group, what I

22 suggest is that we go around the table and each of

6

1 you introduce yourself and say where you\'re from.

2 And then I\'m going to turn it over to Jim who will

3 run the rest of the session.

4 MR. LEVITT: Okay. My name is Cliff

5 Levitt. I\'m from Baker College Center for Graduate

6 Studies in Flint, Michigan. I\'ve been in the

7 profession about 12 years.

8 MS. GARCIA: Hi. My name is Maria Garcia.

9 And I\'m with Robert Morris College. I\'m a financial

10 aid advisor and I\'ve been a financial aid advisor for

11 about three years now.

12 MS. JOERSCHKE: I\'m Bonnie Joerschke from

13 Purdue University. I joined Purdue just last

14 February as their Associate Director of Policy

15 Analysis and Quality Assurance. I have been in the

16 profession for 21 years previously at Oklahoma State

17 University and University of Tennessee and Colorado

18 Northwestern Community College. So this is my

19 venture with Purdue.

20 MS. HALL: I\'m Joyce Hall. I\'m Director

21 of Financial Aid at Purdue. I\'ve been director for

22 ten years and in the financial aid over 20 years.

7

1 I\'ll just leave it at that. And I had, we have

2 66,000 students on our main campus and we have three

3 regional. Although they don\'t report to me I am

4 responsible for coordinating policy and review for

5 financial aid for all those campuses. We all meet

6 together to do that. And I wanted to tell you that

7 50 percent of our students are on financial aid. So

8 obviously, the regs certainly impact us. And my

9 staff, we did count this up. I have 340 years of

10 experience in financial aid. That\'s not counting the

11 regional campuses, so we probably get 400 if we count

12 them.

13 MR. GETTE: Well, as Jean said, I\'m Jim

14 Gette from the Office of General Counsel but have

15 been doing a lot of work recently in regulations

16 although I have to say my history with extensive work

17 on the policy in student financial assistance has

18 been for the last six months. So I have as little

19 experience as you all have years of experience.

20 Which is probably very appropriate for us to be here

21 to hear your comments. One of the nice things about

22 coming to the table fresh on issues is that you\'re

8

1 not shaded by a history of opinions on things. I

2 found that during the negotiated rule making that

3 actually helped a lot from the Department\'s

4 perspective.

5 What we really want to do is hear what you

6 have to say. I know that you all have some prepared

7 comments and hopefully other folks have issues

8 prepared. What I suggest is that we simply go

9 through those issues, spend a little time talking

10 about them. And then perhaps maybe pick your brain

11 on some things that came up in some of the earlier

12 sessions that we\'re still interested in hearing a

13 little more about.

14 I don\'t know, Joyce if you would like to

15 get the ball rolling?

16 MS. HALL: Yeah, I have them written out

17 but I don\'t really want to read them to three people,

18 so. We also, we sent a letter yesterday to Colleen

19 McGinnis. It has a summary of the issues from our

20 vice-president, our executive vice-president.

21 MS. VETA: Okay. And we\'ll take, we can

22 take both of those and append them to the record.

9

1 MS. HALL: Oh, good. Do you have your

2 copy because mine\'s probably just a draft of his.

3 MS. VETA: You\'re welcome to submit it to

4 us later if you\'d like. Or you can just share with

5 us the substance. Whichever you prefer.

6 MS. HALL: Okay. The first think I\'d like

7 to talk about is the, you know, we obviously know

8 that the student loan programs have come a long way

9 from being so burdensome but in particular the

10 Perkins Loan program, right now we don\'t feel that a

11 student should have to put in writing or request for

12 an in-school deferment because, you know, with the

13 technology that\'s there and e-mail and voice response

14 systems that we think also school system should be

15 able to sweep their own data base. We have students

16 that are on Perkins Loan, for instance, that come to

17 the Collections Office and the Collections Office

18 says you have to go over and get this in writing from

19 the registrar that you are in school. And so we

20 really think that that ought, you ought to be able to

21 do that.

22 And also we think there\'s excessive

10

1 documentation on the Perkins Loan program for

2 economic hardship and that it ought to be similar to

3 the FFEL Program. So that\'s kind of the issue that

4 we had on Perkins Loan.

5 MR. GETTE: On the second issue, what, how

6 does what you\'re required to collect compare to what

7 is required in the FFEL Program?

8 MS. HALL: Are you familiar with that,

9 Bonnie? Because I think that it\'s just that it, they

10 require much more documentation collection than you

11 do \--

12 MS. JOERSCHKE: It seemed like you

13 negotiated rule making and you\'re stream-lining a lot

14 of the deferment and forbearance requirements and our

15 university Collection Office was interested in trying

16 to streamline Perkins in similar fashion. And that

17 was kind of where they were coming from with this

18 having to collect in writing the student\'s request

19 for an in-school deferment when they\'re actually on

20 campus. And considering that a burden just to the

21 students themselves, you know, it\'s confusing. Why

22 can\'t you use my record? And why can\'t we just sweep

11

1 our own records? They actually gave me some

2 documentation that showed where they were getting it

3 out of the regs and following through with it.

4 So, anyway, that was their concern was

5 just that there were some things that were being done

6 in the FFEL Program pretty much through negotiated

7 rule making in terms of the FFEL Program.

8 MR. GETTE: Right.

9 MS. JOERSCHKE: And \--

10 MS. HALL: I think it was the forbearance,

11 too, that \--

12 MS. JOERSCHKE: Very much so.

13 MS. HALL: \-- much more collection of

14 information.

15 MS. JOERSCHKE: Being able to do things in

16 a more streamlined and efficient manner for the FFEL

17 Program and wanting it to maybe be, you know, carried

18 over to the Perkins Loan Program, if at all possible.

19 To kind of look at those issues and just to, in terms

20 of the \--

21 MR. GETTE: There was some modification of

22 the statute in the Higher Education Amendments to,

12

1 in-school deferments for FFEL Program, so.

2 MS. HALL: Right. But, we\'re saying it

3 for Perkins.

4 MR. GETTE: Yeah, absolutely. That may be

5 a model that we \--

6 MS. HALL: Need to look at.

7 MR. GETTE: \-- should look at. Obviously,

8 we\'ll have to do it in the context of the

9 Perkins \--

10 MS. JOERSCHKE: Certainly.

11 MR. GETTE: \-- statute, statutory

12 language.

13 MS. JOERSCHKE: I did, like I said, I did

14 bring a number of those pieces of information that

15 they did provide to me to show where it was, you

16 know, written about the in writing kind of stuff.

17 MR. GETTE: Okay.

18 MS. HALL: May we go on to the next issue?

19 MR. GETTE: Yeah, that would be great.

20 MS. HALL: The next issue for us health

21 professions, we do have veterinary medicine and

22 pharmacy programs. The process just doesn\'t seem to

13

1 work for those kids. We think that the

2 Department and HS ought to get together to look at

3 that facet for that particular group, the health

4 professions, it\'s just not a seamless process.

5 There\'s a lot of confusion over the parent data

6 requirements. You know, for most aid we don\'t need

7 the parent data but for a particular med loan we need

8 the parent data.

9 So every year I get up and say to the

10 students, now, it tells you not to put the parent

11 data on there but if you want this little bit of

12 money we have over here, then do provide the parent

13 data. But I assure you that we won\'t use it for the

14 \-- funds. I mean, I look like this idiot, idiot. I,

15 if you all, if I could just get up at one of those

16 meetings and not have to say that I would love it.

17 So, it\'s just not a very good process.

18 The other thing is the definition of what

19 is a graduate professional student is just unclear.

20 So, therefore, I think there\'s any consistent

21 treatment of those students across the campuses, I

22 think we all try to define it the way we feel is

14

1 right but then you talk to your colleagues and they

2 have different opinions. Are they an undergrad? Are

3 they a professional student? Does it magically

4 happen in the third year? And I certainly think

5 there needs to be some, you know, consistency there.

6 Maybe, it can\'t be because of the different programs

7 but at least I think there ought to be some dialogue

8 getting those folks together because I don\'t sit and

9 deal with these kids every day. But I have a person

10 that every chance she gets she catches me about this.

11 So I wanted to make sure that you all were aware of

12 that.

13 And we do spend a lot of time for a very

14 small population. I practically have a full time

15 administrator. She does the other students but a lot

16 of her time is spent just helping 250 veterinarian

17 medicine students, you know?

18 MS. ABADINSKY: Good morning.

19 MR. GETTE: Alisa, come on up and join us.

20 MS. HALL: Here, we can put you right at

21 this table. The next issue is alternative loans.

22 MR. GETTE: Before we go on \--

15

1 MS. HALL: Oh, yes.

2 MR. GETTE: \-- on the vet med loan, is

3 that an HHS loan?

4 MS. HALL: Yes, yes.

5 MR. GETTE: Okay.

6 MS. HALL: It\'s a small amount of money

7 that we do get. I think it\'s probably about \$100,000

8 if it\'s that or a \$150,000.

9 MR. GETTE: Okay.

10 MS. HALL: You know, a part of me is, gee,

11 why do I even mess with this? I could not have it.

12 But then, as a Director of Financial Aid, it\'s

13 difficult to tell people, well, I turned down that

14 money.

15 MR. GETTE: Right.

16 MS. HALL: So.

17 MR. GETTE: So, and, but you do use the

18 fast foot to make your determinations for

19 eligibility.

20 MS. JOERSCHKE: You have to collect

21 parental data.

22 MS. HALL: Parental date. But, you know,

16

1 they read through it and they go, oh, I\'m a

2 professional. I don\'t have to provide this.

3 MR. GETTE: Right.

4 MS. HALL: And then I have that five-on

5 spit money and then I got to chase these kids somehow

6 and make them get the parent data. And assure them I

7 won\'t look at it.

8 MR. GETTE: Right.

9 MS. HALL: Trust me. But, so, I just, I

10 think it would be very good to get a group of health

11 profession people and Trudy Horner is my counsel with

12 the hands on. I\'m sure she would love to

13 be part of this group, we\'ll talk about that.

14 I\'d like to talk about alternative loans.

15 This year our alternative loans jumped 70 percents.

16 We saw 1.4 million dollar increase so far. We think

17 what\'s happening is more students are taking out the

18 loan that the parent would normally take out, the

19 parent loan. Because the parents can\'t deal with the

20 repayment provisions in the parent loan. So we

21 really would like to see the Department look at a

22 more favorable repayment, you know, whether there

17

1 could be something where the parent pays the interest

2 just like the student does. And chooses to let the

3 other capitalize. But this is just very significant.

4 It\'s a concern to me because being an in-

5 state school, you know, we think we got a reasonable

6 cost and here this is happening. We also are seeing

7 a lot of flurry of loans, unsolicited loans being

8 sent to our students. The second part of the issue

9 is that \--

10 MR. GETTE: Sorry about that.

11 MS. HALL: We think the second part is

12 that they\'re taking out these loans and they don\'t

13 even know what they\'re doing. They don\'t know that

14 there was a parent loan. So we haven\'t had the time

15 to sit down and call these people. But because we

16 had such, and I call the lenders. Are you doing this

17 un-solicit? Oh, no. So, we haven\'t tied this down

18 yet but we think that unless it\'s, if they\'re in a

19 Title 4 Program, you can do with them just like you

20 do with us and say, if you can participate in Title

21 4, unless you have an agreement with the school to

22 send applications to the students don\'t do it.

18

1 Because that\'s starting to happen.

2 Students getting these things in the mail.

3 Oh, just go on-line and complete this thing. And

4 they\'ve never gone through the financial aid process

5 to even see that they\'re eligible for a parent loan

6 or a Stafford Loan. I think we have some kids that

7 don\'t have Stafford loans. And, you know, I\'ve got,

8 we\'ve got 27,000 students on my campus that file for

9 financial aid. So I can\'t sit down and talk to these

10 personally. Or every time a loan comes in go, oops,

11 and mail them something and say, did you consider

12 this?

13 So, I just would like some look at that.

14 Also, I\'m not sure with the regulations. It\'s not in

15 here but, you know, the fact that we didn\'t increase

16 the loan amounts had some impact. But there\'s just

17 something going on there that we\'re not sure that\'s

18 it to the best interest of students. It\'s getting

19 very aggressive.

20 MR. GETTE: On the Plus Loan issue, is the

21 concern with the process or with the terms of \--

22 MS. HALL: I think it\'s the terms.

19

1 MR. GETTE: \-- of the loan itself.

2 MS. HALL: The process, no, it\'s the

3 terms, the fact that they have to begin repayment.

4 Minimum is \$50 but depending on how much they borrow

5 it wouldn\'t necessarily be 50. So the second year

6 they hit, you know, it\'s compounding and yet they\'re

7 also trying to make maybe their own payments to the

8 school. So we think that\'s happening. So we think

9 we ought to just investigate that a little more and

10 see what\'s going on.

11 MR. LEVITT: Can I follow up on that?

12 MR. GETTE: Yeah.

13 MR. LEVITT: Number one, I agree with her

14 a hundred percent. I\'m seeing, in the grad school

15 especially, and we do have some undergrads that go to

16 our campus, but the terms of the loans that are being

17 offered mirror the Stafford Loan Program. I mean,

18 financial institutions are starting to offer an

19 interest rate. They\'re starting to offer things

20 like, I had a loan come in the other day where they

21 actually offered a deferment on the loan while the

22 kid was in school. So, I mean, I agree a hundred

20

1 percent. Maybe take a look at the Plus Loan terms

2 and see what you guys can come up with.

3 MS. HALL: Well, and this isn\'t in the

4 testimony but it\'s something I remember, that I\'m

5 dealing with now as we speak. And we have some

6 lenders that have started programs from their

7 consumer loan side. So they\'re telling us they\'re

8 consumer loans. They are not involving in the

9 school. And lo and behold the check pops in on our

10 campus for \$20,000, co-payable. And then we have to

11 backtrack and we\'re telling them, sorry, Charlie. It

12 came on our campus. We\'re treating it like student

13 aid. We\'re going to go back and look at their

14 financial aid.

15 So I just told them recently, okay, if

16 it\'s a consumer loan, don\'t send me the check and

17 they told me they wouldn\'t. I feel very comfortable.

18 If they tell me it\'s a consumer loan then why should

19 Purdue have their check? Put it in the parent\'s bank

20 account and we trust they will pay their fee because

21 they will not be registered and they can\'t come. So,

22 you know, we\'re not, so, I just, you know, I know

21

1 they don\'t like the financial aid people. They don\'t

2 want us referring students to banks. But honestly,

3 we are the ones that are trying to tie the picture

4 together. And we know what the student need is and

5 we know what our students\' needs are. And we\'re

6 trying to keep debt down.

7 And I think there\'s a little bit of a

8 advisory role there for lenders not, their major

9 concern is not keeping debt down so I\'m concerned

10 about that. So I\'ve got to contact, there\'s another

11 bank. There\'s two that I know of. But there\'s

12 another one and we\'re going to be tracking that down

13 Saturday and calling this a student loan or a

14 consumer loan. If you\'re calling it a student loan

15 then you have to have me there finding the cost. And

16 they\'re not doing that. So, or the financial aid.

17 So obviously the kid end up being woefully over-

18 awarded if you look at it. So that\'s starting to

19 kind of creep up.

20 MS. VETA: Do you have any suggestions on

21 how to approach that?

22 MS. HALL: I think that the lender should

22

1 have an agreement with the school before they start

2 mailing unsolicited apps to students. Now, what

3 they\'re going to say is their web. So, I should be,

4 it should be on the web. But if they\'re entitled

5 more funds then I don\'t think that they ought to be

6 getting in the middle of the financial aid process

7 before we even know what\'s going on with the

8 students. So I think they should have an agreement

9 with the school before they do that.

10 MR. BAKER: Joyce, are these lenders also

11 \-- that they do business with?

12 MS. HALL: Oh, yes.

13 MS. JOERSCHKE: And they\'re in alternative

14 programs. I mean, they\'re doing all of it.

15 MR. BAKER: And they might have somebody

16 with an alternative loan that \--

17 MS. HALL: Didn\'t have a parent loan.

18 MR. BAKER: Didn\'t have a parent loan or

19 maybe even the student didn\'t have a staff loan?

20 MS. HALL: Could be, yes. So it\'s not a

21 good thing. I mean we just need a little more

22 dialogue on this and looking at what\'s going on. Get

23

1 input from some other schools, too, to see are they

2 having problems.

3 MS. JOERSCHKE: And like Joyce said, we

4 had 1.4 million dollar increase from one year just to

5 the next. And that, that isn\'t even counting what

6 we\'ve seen so far this fall.

7 MR. BAKER: And these are dependent

8 students because this particla \--

9 MS. JOERSCHKE: Yes.

10 MR. BAKER: \-- because this \--

11 MS. HALL: Yes. And they\'re dependent \--

12 MR. BAKER: \-- because of this plus issue

13 that you \--

14 MS. HALL: Right. They\'re dependent

15 students. You know, so it\'s 70 percent increase so

16 far. And we were drowning in those loans. And,

17 obviously, you know, when I\'ve got 140 million in

18 financial aid, a lot of the automation has gone to

19 those big programs. The alternative is sort of last.

20 And then all of a sudden, it quadruples. And then

21 the lenders are telling the student, well, it\'s the

22 school\'s problem. That we can do your loan in a snap

24

1 here if you could just get in school. So, I\'m kind

2 of dealing with that, too.

3 MS. JOERSCHKE: Well, on the other end of

4 it we\'re trying to automate, doing alternative loans

5 because \--

6 MS. HALL: Automate that, but we\'re going

7 to have to automate that whole thing \--

8 MS. JOERSCHKE: \-- we can\'t handle them.

9 MS. HALL: \-- process and get it

10 downloaded and do all that. And, so, we will be, we

11 hope, that things have slowed down because we started

12 in August so we are hoping to make some phone calls

13 to parents to students to say where did you get the

14 loan app? When did you take it out? But

15 realistically, I suppose I could start getting ugly

16 and say, unless you come into my office I will not

17 process this paper. And then that by itself would

18 deter some people. But then again, it puts more

19 pressure on myself. So we just have to do something

20 and look at this process.

21 The next thing is over-rewards. We feel

22 glad that we are exempt or we can use a \$300

25

1 overboard tolerance because we\'re in the experimental

2 site. So we can use it for all programs. And we

3 have really appreciated that. It has, the data that

4 we\'re provided has been, I think, helpful, will be

5 helpful to the Department in showing that it\'s just

6 really a waste of time to make schools do this. But

7 we suggest that the tolerance be raised to \$500.

8 You know, I think you have to keep in mind

9 that when we establish an education budget, it is

10 that. It is an estimate. And we really feel, and

11 this is where, you know, generalized student might

12 end up with \$500 somewhere. But instead they get

13 \$100. And then they get \$300. So \$100 you might

14 have to do something. Then you re-grind over it, it

15 throws it over \$300. So then you do it. And then

16 they get another \$100. And so then you have to re-

17 look at it again.

18 We feel like we\'re just grinding through

19 it and grinding through it and grinding through to

20 chase dimes. And I know \$500 is not a dime but in

21 the big 140 million dollar picture on our campus for

22 some students to have \$500 over would realistically,

26

1 I can sit down at a table with anybody and argue that

2 my estimate probably should be, could be \$500 more,

3 could be \$500 less. So, I think that over the, with

4 inflation and everything it really ought to be the

5 same for all programs and \$500.

6 And, I have to read this to you. Coming

7 from a university which is proud to be known as,

8 well, first of all. Indeed we feel that we grind

9 over and re-grind financial aid files with enough

10 computer code to launch a man to the moon. Coming

11 from a university which is proud to be known as the

12 cradle of astronauts, we enjoy watching space

13 launches. But let\'s stop making financial aided

14 administration so complaints we think we are

15 launching a space shuttle. I had to say that.

16 MR. BAKER: You mean it\'s rocket science.

17 MS. HALL: That\'s right.

18 MS. JOERSCHKE: Well, I think what\'s also

19 born out in the notes you\'ll see is that the average

20 \--

21 MS. HALL: Yes.

22 MS. JOERSCHKE: \-- scholarship is \$500. I

27

1 mean, it\'s a \$500 scholarship. And typically \--

2 MS. HALL: One time, and you\'re going to

3 get, one time so over the five years that they\'re at

4 Purdue they got that little PTA scholarship. And I

5 can argue with you that over five years they\'re house

6 attendance wavered \$100 a year. And so.

7 NSLDS is another area. Log-ins, maybe

8 it\'s just our campus, log-ins take approximately ten

9 minutes. The inquiries require social security

10 number, first name, date of birth. If one\'s missing

11 you have to enter a different mode to get that. Of

12 course, it ties up our phone lines so if you ask

13 somebody a question you have to run to another office

14 to dial them up and as a question.

15 MR. JOERSCHKE: To the help line.

16 MS. HALL: Help line. And it does not

17 allow you to switch to another student. You have to

18 back out of the record and re-log in and go back.

19 You really ought to be able to go to the next

20 student. And now, I have to admit I don\'t sit and do

21 this every day so I\'m just trusting my staff on this

22 one.

28

1 Also, we think that the pass codes, it

2 ought be free. I have 40 plus staff. I\'m not going

3 to pay \$75 doing the check. And I got to have some

4 flexibility because all my staff\'s C students so they

5 need to be able to look up and help the student and

6 not say, well, you got to go down the hall and see

7 the three people that have the pass code. So, we

8 think that ought to be free and I actually talked to

9 someone on my staff, or used to be on my staff, that

10 worked on the NSLDS. He said it, he thought it

11 originally had intended to be free.

12 MR. BAKER: You\'re still looking this, I

13 think they call them CICS screens? The kind of ugly

14 \--

15 MS. HALL: They\'re going to change?

16 MR. BAKER: Absolutely. And everything

17 you asked for is \--

18 MS. HALL: Is in there?

19 MR. BAKER: \-- in the new, I don\'t know

20 about the fee. I was surprised they charged a fee,

21 but.

22 MS. HALL: Yeah, there is a fee.

29

1 MR. GETTE: But you\'re absolutely right

2 getting in, having the three items. That\'s going to

3 be loosened up.

4 MS.HALL: Oh, great.

5 MR. GETTE: The screens are going to be

6 Windows type screens. They\'re really beautiful. And

7 you can move from student to student or screen to

8 screen without going back to square one.

9 MS. HALL: Well, that\'s great to hear.

10 MR. GETTE: Like in January.

11 MS. HALL: Oh, that\'s great to hear.

12 MS. VETA: Joyce suggested this and we\'ve

13 already done it.

14 MS. JOERSCHKE: Will we still have to go

15 to another office if the one is being utilized and

16 there\'s a difficulty?

17 MS. HALL: You mean like \--

18 MS. JOERSCHKE: And then if you have a

19 problem you need the Help Desk being as Help Desk,

20 you have to go to another office.

21 MS. HALL: To use a phone line.

22 MS. JOERSCHKE: To use a phone line?

30

1 MR. GETTE: Suggestingly, it sounds like

2 what you\'re saying is that right now your link status

3 LDS are through modems and not a web based product.

4 And I guess \--

5 MS. HALL: Yeah, so therefore, you \--

6 MR. GETTE: The issue there is probably

7 whether that\'s part of the modernization effort that

8 we\'re considering taking NSLDS to a web based \--

9

10 MS. VETA: Even if you go on the web it

11 still is tying up your phone line, right?

12 MS. GETTE: Well, most offices now are

13 like our offices have both lines coming in. And I

14 don\'t know if that\'s true for you.

15 MS. HALL: We don\'t. But that\'s probably

16 something we \--

17 MR. BAKER: I think this one for you to

18 look at is a local issue. The way they\'ve configured

19 your computers.

20 MS. HALL: Yeah, maybe.

21 MR. BAKER: Because, if I remember

22 correctly, your not in the newest building in the

31

1 world.

2 MS. HALL: Well, actually, we did move but

3 it\'s been ten years and we have a new student service

4 building and it\'s got, it\'s on the backbone.

5 MR. BAKER: Have them take a look at that

6 because \--

7 MS. HALL: Yeah, we will.

8 MR. BAKER: So, if you\'re on the telephone

9 line so I couldn\'t call you? She can\'t call you?

10 MS. HALL: Right.

11 MR. BAKER: I think that\'s a local, I

12 think that\'s a local configuration.

13 MS. HALL: \--

14 MR. BAKER: I need to find out about that

15 money thing because that\'s \--

16 MS. HALL: Yeah, because there was \--

17 MR. BAKER: Actually, we require access.

18 When we require things we shouldn\'t be charged for

19 them.

20 MS. HALL: That\'s what we thought.

21 MR. BAKER: Are you paying us or the

22 telephone company or \--

32

1 MS. HALL: I don\'t know who we\'re paying.

2 Maybe \--

3 MR. BAKER: Your IT guy down the phone.

4 MS. HALL: Maybe that\'s, maybe it\'s a

5 local problem.

6 MS. GARCIA: \-- seemed to make \--

7 MS. HALL: Because he had challenged him

8 saying, gee, we need more than \--

9 MS. VETA: We\'ll take a look at that.

10 MS. HALL: Do that. Take a look at that.

11 And also, you know, we just reconcile and report data

12 up and down the line. So we would like to see,

13 especially this relates to NCAA athletic conferences.

14 Again, I have a full time administrator who does

15 occasionally see other students but the majority of

16 her time is taken up with the NCAA. And I realize

17 you all do not have anything to do with NCAA but the

18 athletic reporting, we have reports up the wazoo on

19 athletics. So we just think that ought to be looked

20 at to say, are there reports that are already out

21 there so you don\'t have to require separate athletic

22 reporting through the federal regulation. I think

33

1 you\'ll find that the data is there and you can take

2 it and load it somewhere into a common data base and

3 not require us to keep repeating it six different

4 ways. So, have I made myself clear on athletic \--

5 MR. BAKER: This is just extra reports,

6 right?

7 MS. HALL: Yes. It\'s just ridiculous.

8 Another issue is data base failures. We still think

9 that we need the ISIRS to inform the student of their

10 ineligibility and we think the SAR should refer them

11 to the Department of Ed for resolution of their

12 ineligibility. Right now we think that the SAR

13 should direct the student to the appropriate

14 government agency to resolve the database failure or

15 explain the ineligibility to the student. And get

16 the schools out of the middle of verifying matches

17 with all government agencies. Example of, and we

18 think that the central office should be well staffed

19 so the people can answer questions. And we know that

20 there\'s a movement to do that.

21 An example, we had a student call a

22 Department 1-800 number and they were told he could

34

1 not change the address on the renewal FAFSA because

2 the parent did sign the FAFSA. So instead of helping

3 him they just referred him back to our office. You

4 know, what am I going to tell him that\'s different

5 than the Department? So that\'s just one. But really

6 you get back, especially we\'re concerned about this

7 drug thing and we hope that that is there.

8 But we aren\'t, I mean, here we are making

9 decisions that someone is a veteran or not a veteran

10 on some of those issues on our campus. And we just

11 don\'t think we ought to be doing all that. So we

12 think it ought to be between the agency and the

13 Department. Agency being student. Not agency,

14 Department, school. And that\'s what, we get into a

15 triangle. And nobody\'s selective service to tell

16 that they\'re not a veteran and we come back and we\'re

17 supposed to; I\'ve never been in the army before. But

18 we\'re supposed to read it and say you are a veteran.

19 And, you know, that makes a big difference in

20 independent and dependent. And these people can get

21 mad. And not just veterans, you know but people that

22 have been on drugs. I don\'t want to deal with it.

35

1 You know.

2 MR. BAKER: And the veterans know how to

3 use guns.

4 MS. HALL: Uh?

5 MR. BAKER: The veterans know how to use

6 guns.

7 MS. HALL: Yeah, you know, so I, I just,

8 one fellow, I mean, I don\'t know if we ever resolved

9 him. We\'ve been arguing for like a month now.

10 MS. JOERSCHKE: He\'s remaining dependent.

11 MS. HALL: Is he?

12 MS. JOERSCHKE: Yes.

13 MS. HALL: And he\'s probably not happy.

14 MR. BAKER: He says he\'s a veteran?

15 MS. JOERSCHKE: He says he is but he\'s

16 not.

17 MS. HALL: And the Department is just

18 leaving it to us to decide. I think that\'s, in a way

19 that\'s kind of nice and maybe my colleagues wouldn\'t

20 like that but I just don\'t think we ought to be

21 involved in those issues. And immigration and

22 naturalization services either.

36

1 MR. GETTE: At what point would, I mean,

2 in the first instance you\'re making a determination

3 on campus. And so the information is going to float

4 up to the Department. At what point in the process

5 do you see the Department undertaking \--

6 MS. HALL: At the level that they\'ve been

7 denied comes out on the report and tells the student

8 either to call the Department or to call Social

9 Security Administration, Immigration or Selective

10 Service to get whatever it is you need to get to the

11 Department. But right now, it\'s like this three way

12 road.

13 MR. GETTE: So it\'s basically notifying

14 them on the \--

15 MS. HALL: Uh-huh.

16 MR. GETTE: \-- the way they should go.

17 MS. HALL: And say this is what you need

18 to do.

19 MR. GETTE: Okay.

20 MS. HALL: The last, hey, lastly, we just

21 think the Department, we need some more guidance

22 quickly on drawing down funds prior to January 1st.

37

1 For example, should schools draw down funds on

2 December 27th because we have credit accounts ten

3 days before you\'re allowed to do that. So should we

4 draw funds down on December 27 to cover Pell and SEOG

5 disbursements from December 27 say to January 7th?

6 Apparently, an individual in the

7 Department has informed our institution to do this in

8 case the Department has a Y2K problem and is unable

9 to transfer funds as requested. The question is will

10 the Department allow for a short-term grace period

11 from regulations related to the three day rule of

12 excess cash? So we\'re looking for some guidance on

13 that. And I think that, we need something on that

14 right away.

15 MR. BAKER: If you have a disbursement on

16 January 7th and you generally disburse ten days

17 before?

18 MS. HALL: Uh-huh. Classes start early

19 January, so you get a lull of the crediting of

20 accounts ten days before.

21 MR. BAKER: All right. So if you drew

22 that on a Monday on the 24th, the 25th \--

38

1 MS. HALL: Then I\'d have it too long.

2 MR. BAKER: Why?

3 MS. VETA: Because the 27th is ten days.

4 MS. HALL: Ten days and you can only have

5 it, want you \--

6 MR. BAKER: Classes start on the 7th?

7 MS. HALL: I think they start on the 14th.

8 MR. BAKER: Oh, okay.

9 MS. HALL: And so you got that \--

10 MR. BAKER: Ten days before is a few days

11 into January.

12 MS. HALL: Yes.

13 MR. BAKER: Okay.

14 MS. HALL: And would throw us into that

15 excess cash, so \--

16 MR. BAKER: Right, right.

17 MS. HALL: \-- you know, there needs to be

18 some kind of statement that, if schools do that

19 they\'re not \-- excess cash.

20 So those are my comments. I\'m sure that

21 we could come up with more and I think Jeff and I

22 talked about this being a, there\'s never, seems like

39

1 never a good time to pull financial people away. But

2 we do appreciate the opportunity to comment.

3 MR. BAKER: Good comments, thank you.

4 MR. GETTE: All right. Do you have a

5 list?

6 MR. LEVITT: Well, actually my association

7 sent me here so based on my association \--

8 FEMALE VOICE: Are \--

9 MR. LEVITT: Yes. I\'m here just to listen

10 on the association but the minute my boss, the minute

11 my boss found out that I was coming here he had a

12 couple of issues that he wanted me to bring up with

13 you guys.

14 There, actually, it\'s an ongoing issue

15 with the reporting on the campus safety from the re-

16 authorization. It appears that there\'s, you have the

17 Campus Safety Act on one hand and then you have the

18 new regulations coming out with the re-authorization

19 on the other. And they appear to be in conflict with

20 each other. We\'d like to see somebody take a look at

21 that to see if there can be some resolution.

22 MS. VETA: Where do you see the conflicts?

40

1 MR. LEVITT: Well, the reporting

2 requirements for the Campus Safety Act is already

3 there. And now based on the new regs that we\'re

4 going to have to send the report every year to the

5 Department of Ed. So, actually we\'re sending two

6 sets of information. One from the Campus Safety Act

7 where you have to report campus crime stats and all

8 that kind of a thing. And then you have to turn

9 around and you\'re going to have to send a report to

10 the Department of Ed. We really, I guess, I guess

11 what I\'m saying is, is, what is the Department going

12 to do with that report? Why, I mean, it seems like

13 it was working a little better before when you had

14 to, if the Department wanted the report they would

15 request it from you. So we\'d like to see something

16 like that looked at.

17 And the original, and this is coming from

18 my, my Director of Campus Safety, the original

19 purpose of the law was to get after drug using and

20 binge drinking, that kind of thing. Now with the new

21 reporting requirements where you\'re responsible for

22 public property. If you start looking at that you\'re

41

1 going to start looking at when you send your people

2 on a field trip, if they go to study overseas, what,

3 you know, what\'s the definition of public property

4 now?

5 We have corporate sites where our

6 instructors go and they teach right at, say, GM or

7 Ford. Does that mean we have to report every crime

8 that happens within that building because now that

9 becomes public property? So we\'d like to kind of get

10 a better clarification of what public property is.

11 I do have some, my Director of Student

12 Loans for the Central Loan Office wanted to say that,

13 and this is good news that they\'re really happy with

14 the changes in the loan programs.

15 MS. VETA: Good, thank you.

16 MR. LEVITT: And they wanted just to say,

17 you know, you did a good job on that, so.

18 MS. VETA: Thank you.

19 MR. GETTE: That was my team, so I\'ll take

20 personal credit for that.

21 MR. LEVITT: And that\'s all I have. It was

22 mainly that campus safety issue.

42

1 MR. GETTE: Alisa, do you have some items

2 that you can share with us?

3 MR. BAKER: Introduce yourself.

4 MR. GETTE: Right, yeah. And you might

5 want to introduce yourself for the group and for the

6 reporter.

7 MS. ABADINSKY: Okay. I\'m Alisa Abadinsky

8 from the University of Illinois of Chicago. And I

9 think you heard a lot of \-- comments from Ann Marie

10 in Washington. And I\'ll just repeat where we\'re

11 coming from.

12 I know we\'re still waiting for the final

13 rule that will allow us to process deferments without

14 a written request \-- we\'re just, we\'d really, really

15 love to see that one soon.

16 Another item that I heard recently from

17 our membership is on electronic mail. If we send an

18 item, a notice that we\'re required to send to a

19 student, the electronic mail, something that we would

20 normally drop in the mail, we have to keep a receipt

21 for the electronic mail or if you drop it in the

22 mailbox you don\'t have a receipt or anything like

43

1 that. And that just seems like an additional

2 administrative burden as an institution.

3 I would also, I wrote you a statement

4 about our Y2K issue. And we are very concerned,

5 also, as a campus that we would love to move the

6 money before the new year just because of the

7 unknown, you know. I don\'t think I\'m going to stock

8 pile water and everything else like some of the

9 people in this country our doing, but we would like

10 to know that our students are going to have some

11 money to pay for what they need to pay at the

12 beginning of the new school and not to impose

13 hardships on people. So this is a once in a thousand

14 year thing and I think we need to \--

15 MS. VETA: We\'re worried about precedent

16 here.

17 MR. BAKER: She thinks I\'m going to be

18 doing this a thousand years. We have, the Y2K stuff

19 actually, we have contingency plans if the reporting,

20 the money is distributed a number of ways, I should

21 note. But for instance, \-- money, if the reporting

22 system fails on our end or if Edcaps or Gaps or any

44

1 of that fails, we have contingencies to get money

2 through the federal reserve pipeline just by-passing

3 all of that.

4 The perceptions are interesting, of

5 course, and pretty obvious. We are also developing

6 contingencies about what happens if school systems

7 fail. We\'re not just going to say, too bad, because

8 there\'s kids out there who need the money. So there

9 are some things looking at, at all this three day \--

10 MS. VETA: And I think the suggestions you

11 both have made are worth our looking into further.

12 MR. BAKER: Pretty soon though because

13 otherwise it\'s not going to matter.

14 MR. GETTE: Right.

15 MS. HALL: Right, right.

16 MR. LEVITT: Jeff, has there been more

17 schools who have \-- now? I know that you\'ve been

18 getting the word out on the \--

19 MR. BAKER: There\'s more and I don\'t know

20 how many more. It was kind of disappointing early on

21 but I think we kicked a little bit and associations

22 did some help and we got letters out to the

45

1 presidents from the secretary and from Mike and

2 everything. So I\'m sure there\'s more.

3 MR. GETTE: The numbers have gone up five

4 fold but it\'s still much lower than we\'d like to see.

5 I think successful testing has gone from 46 to 250

6 something. You know, but with how many institutions,

7 Jeff?

8 MR. BAKER: 7,000.

9 MR. GETTE: 7,000. We still have a lot to

10 do. Mike testified, Mike Smith testified about this

11 this past week up on the hill. And the focus on the

12 committee was not, was no longer whether the

13 Department of Education is prepared but whether our

14 partners in the process are prepared for what\'s

15 coming. And they\'re concerned that they may not be

16 in the largest extent.

17 MS. VETA: And to that extent, in our

18 opportunity to visit with you all, we would very much

19 encourage you not only to take the message back to

20 your own institutions but to your associations to

21 encourage them to do this testing. It really is

22 critical that schools go through this process as

46

1 well. There\'s just too much at stake.

2 MR. GETTE: They have announced that the

3 window for testing will be open now through most of

4 November, I believe. And so it gives those who

5 didn\'t feel like they were quite prepared some more

6 opportunity. But, obviously, the earlier you get

7 into testing the better.

8 MR. BAKER: Just one more thing I want, if

9 you get any sense from people that they don\'t want to

10 test because if they fail that will look bad and

11 we\'ll put a check mark next to them. The same people

12 aren\'t dealing with any of the hedges. It\'s all a

13 help thing.

14 MS. HALL: You know, we ran that back all

15 the way through our management information area. And

16 I forgot, they really feel like they\'ve done it but I

17 don\'t know if we\'re on the record as testing because

18 they said we\'ve done all we can do. We\'ve done all

19 we can do. Just done all we can do. And there\'s

20 something seeing there for me. I, I don\'t know what,

21 I mean, they feel like they\'ve tested everything so

22 maybe I should double \--

47

1 MS. VETA: Have they tested everything

2 with us or just internally?

3 MS. HALL: No, I thought they said they

4 had. So, you know, because I, that\'s obviously is

5 something that I want to make sure we\'ve done. And

6 they say, maybe I can get them to write that down for

7 me and I\'ll paragraph, I\'ll understand it. And

8 double check to see if you all show us as having

9 tested because they real feel like there\'s no

10 problem. This is why there\'s no problem and blah,

11 blah, blah.

12 And we do have vendors and we have, you

13 know, vendors are supposedly have big testing.

14 MS. ABADINSKY: To me testing appears a

15 very small piece of that, right?

16 MR. GETTE: Sure.

17 MS. ABADINSKY: And there\'s so many more

18 places where things can break down. I mean, we\'re

19 doing electronic transfers of refunds to the

20 student\'s bank account. There\'s just a multiple of

21 places. If we can\'t get our charges to move out to

22 the account, we can\'t get the aid to move out to the

48

1 students account. There\'s many places where these

2 can break down along the way.

3 MR. GETTE: On staying in the area of

4 technology, in terms of using electronic mail, you

5 were talking about having the added burden of

6 basically paper work on the electronic process, which

7 theoretically ought to be reducing the amount of

8 instead of increasing it. But where specifically are

9 you seeing that requirement? Is that on all notices

10 you send or is it on exit counseling materials?

11 Where?

12 MS. ABADINSKY: It\'s definitely exist

13 counseling materials. I\'m trying to think without

14 having personally gone back. It was a comment I got

15 and I have that subject to the regulations. I know

16 over the years that\'s always thinking, that stuck in

17 my head that whenever there\'s a requirement to do

18 something you were given the option to do it

19 electronically that we need to keep a receipt that

20 the sender used a; it\'s more than one place.

21 MR. GETTE: Okay.

22 MR. BAKER: It can be an electronic

49

1 receipt, so to speak. It has to be.

2 MR. GETTE: Right. In other words, it

3 can, it doesn\'t have to be a printed piece of paper.

4 It can be stored electronically.

5 MR. BAKER: It\'s a normal, it\'s the single

6 most e-mail systems having you send it certified or

7 registered or whatever you might click. But it does

8 mean you have to do that and store that. I know it\'s

9 a bit of information. And then, I guess, if you

10 don\'t get it back the follow-up that, I think\'s

11 exclusive also. If you don\'t get the receipt back

12 you got to take the next step and maybe send it paper

13 mail or something. It\'s weird.

14 MS. VETA: Maria, did you have any

15 additional issues?

16 MS. GARCIA: Actually, no. I really liked

17 those comments about the alternative loans we have.

18 Our school\'s an undergraduate school. We don\'t have

19 any graduate students. But we have, since I\'ve been

20 there for the past, oh, I\'m going onto four years,

21 and this is the first time I noticed that with a few

22 students, we don\'t have a majority of students, but

50

1 we have had some students who have just come in and

2 the loan has been already guaranteed. And they\'re

3 coming in with already the paperwork that we have to

4 include in their plan. And we\'re like, wait a

5 minute. We gave you everything you are eligible for

6 but, so that\'s why a student gets upset with us.

7 But I\'ve seen that issue happen. Other

8 than that everything is, I mean, I don\'t have any

9 complaints or anything. I haven\'t been really too

10 much in the regulations. Usually my boss is the one

11 with it so, but I really like that comment.

12 And also on the Perkins loan, the

13 deferment form, I did have one student who actually

14 she switched last names and she went into default

15 with our Perkins. Okay? And they still, you know,

16 for her to get out of default, she\'s still enrolled

17 under a different last name and we cannot get her out

18 of default until she comes in and fills out the

19 deferment forms. So that\'s kind of crazy there, too.

20 I just really liked those comments there.

21 Everything else, I mean, I love the master promissory

22 note. I think that was a good idea. It was very

51

1 good. Other than that, I don\'t have any, any, I

2 really didn\'t come prepared either.

3 MR. BAKER: You can send us in the notice,

4 I think she gave you a copy.

5 MS. GARCIA: Yes, she did.

6 MR. BAKER: There\'s an e-mail and there\'s

7 also Colleen McGinnis\'s address to send \--

8 MS. GARCIA: To send some information.

9 Okay. I\'ll show it to, well.

10 MR. GETTE: Yeah, any follow-up

11 information or comments that occur to you after this,

12 please just send them along. You know, any ideas or

13 snippets of thoughts are find as well.

14 MS. HALL: So then you will be putting out

15 maybe some kind of summary of kind of what the issues

16 were that you experienced over the country?

17 MS. VETA: We need to, obviously, prepare

18 this report for Congress and this process we went

19 through. As I indicated, we also expect to have

20 discussions with the community after October 7th and

21 as part of those discussions, you know, talk about

22 the fact that we got a laundry list of suggestions

52

1 from A to Z. Some very technical and some very broad

2 and philosophical. And take all of those issues and

3 talk about where we go from here in terms of

4 addressing.

5 MS. HALL: You know, we have other

6 comments that we just didn\'t feel, you know, because

7 they didn\'t deal with current regulations we weren\'t

8 going to speak to them, but is there any possibility

9 to talk about that SAN, or whatever that is, Student

10 Access, whatever?

11 MR. BAKER: Access America?

12 MS. HALL: I don\'t, yeah. I don\'t feel

13 real qualified. It\'s just that I looked at it. It

14 looks, the whole thing is a loan and the guarantor

15 and the lender sending to SAN and then back to the

16 school. To me, I\'m thinking, I see a third place and

17 I got to reconcile data and we already have really

18 good systems now. Most of us, whether it\'s \-- or

19 Straford loan, we have good systems now. We draw it

20 on cash electronically. But, you know, we\'re then

21 electronically giving it the student. And to add

22 another layer to run that stuff through this thing

53

1 and then run it back to me, what a waste. That\'s the

2 biggest waste. Another third data base that you and

3 I are going to have to reconcile.

4 I cannot tell you, are lives is reconcile,

5 reconcile, reconcile. That\'s all we do now. And we

6 do more of that than seeing students. I\'m under

7 pressure now to get more data people. So I switched

8 to counselor, you know, some counseling people,

9 taking the counseling hours out and totally devote it

10 to data, data, data because I figure if the data

11 falls then it won\'t matter. We won\'t be counseling,

12 you know. So, we\'re all under more pressure to

13 expand our data area to accommodate that. So we

14 don\'t want anymore complexity on that. And we

15 certainly, I mean, some of those people that are

16 doing this, I\'m thinking, what are they doing? I

17 mean, we already have web access and students can go

18 in and check their aid on the web. And they get

19 their full, they don\'t get, well, just the federal

20 part. So they get everything on the web.

21 MR. BAKER: All these alternate loans.

22 MS. HALL: Except that. So, I guess I\'m

54

1 just having trouble figuring out, with all due

2 respect, I don\'t know what they\'re doing because so

3 many schools already have all that. And if a kid can

4 go in and check their aid, it\'s only going to be the

5 federal aid unless the school loads in their aid and

6 I wasn\'t choose to do that because I don\'t necessary

7 want everybody knowing how much private, I mean, not

8 some nameless government agency knowing all my

9 private scholarship money, where it comes from. You

10 know, let\'s, no. I don\'t understand and maybe we\'ll

11 all learn more about that as we go to our

12 associations, but.

13 MS. VETA: Let me ask you a question on

14 that, when you said the students already have web

15 access to all their aid. You\'re saying \--

16 MS. HALL: At least on my campus.

17 MS. VETA: You\'re saying that web access

18 provided by the university.

19 MS. HALL: Yeah. And I, I \--

20 MS. VETA: So you already have \--

21 MS. HALL: \-- see more and more schools

22 that are going that way.

55

1 MS. VETA: Where you have a student

2 account \--

3 MS. HALL: Uh-huh.

4 MS. VETA: \-- that the student can look.

5 MS. HALL: And he can look up their, their

6 purse. And they\'ll be able to bill and everything

7 else.

8 MR. LEVITT: We have it also.

9 MS. HALL: And so, I\'m just not sure

10 what\'s going on with all that. I understand and the

11 need to get rid of the files and have a single data

12 base, you know, so that there aren\'t duplicate

13 records all over the place. The government should do

14 that but I, this other piece and all this other

15 complexity, you know, we get accused of making things

16 complex too. And I get mad over callers as soon as I

17 go, you guys are making this more difficult, too.

18 You know, I mean, because we\'ve been doing it so long

19 that I think we all think the hardest, we ought to do

20 the hardest route. We\'re always fighting, what\'s

21 best for the student? What bottom line is the impact

22 on the student? And so I\'m just not seeing, it seems

56

1 to me like a lot of effort going into some stuff that

2 is, could be directed in other ways to get your data

3 base.

4 I mean, I know you face tremendous

5 challenge to get your single data base, whether it\'s

6 \-- front end and make it look like it\'s one.

7 Something. And I know that is going to be your

8 biggest challenge because we had that on our own

9 campus because we, we\'ve built our own system and

10 we\'re going to be building our own system again. But

11 this, I think we need to be careful here on what

12 we\'re doing.

13 And the other is Project Easy, and I know

14 you all had nothing to do with that. But most

15 recently, I really think you still need a group

16 sitting somewhere that is really not bound and tied

17 down by that they\'ve got to get it done tomorrow.

18 That they\'re really visionary thinking because I\'ve

19 seen it in the writing. It\'s one hazardous thing the

20 project \-- anything and on the other hand we say, oh,

21 look what came out of some of the dialogue, the

22 master promissory notes and some of those things.

57

1 So, as much as you\'re doing with this new

2 process and this is process redesign, or whatever you

3 want to call it, I still think you need a little

4 group somewhere that\'s looking long-term, visionary,

5 that could feed back into the script. Because the

6 group that\'s going to be doing the other is more

7 functional, more it\'s got to produce, we\'ve got to

8 get it done in two years. We got, but not five years

9 out. Not four years out. And I think that group

10 could alert you to problems that are on the horizons,

11 say, like this alterative loan. It\'s like a quick

12 check with the wind and what\'s happening.

13 So, I was kind of, you know, I never have

14 time nor was asked to be part of Project Easy nor

15 would I have been able to but it\'s just, I was

16 admiring my colleagues that put in that time.

17 MR. GETTE: Have you had an opportunity to

18 look at the modernization blueprint?

19 MS. HALL: Yeah, we did. We actually sat

20 down once in our office and went through \--

21 MR. GETTE: Great.

22 MS. HALL: \-- all those comments. We

58

1 haven\'t really had a chance, actually, to look at the

2 drawings and, you know, how this is going to \-- but

3 the more you can get out there to people before you

4 start developing, you know, I would just hate to \--

5 notice something that is not worth while. I mean, it

6 sounds good and would be good. But it\'s duplicative

7 also.

8 MR. GETTE: Right.

9 MS. HALL: And, yes, I know there\'s some

10 schools that aren\'t ready but I just don\'t see the \--

11 being the one to solve this, for the access to

12 students of their student aid records. I see that on

13 the page.

14 MR. BAKER: Do you have any indication \--

15 MS. HALL: It takes some money to develop

16 this.

17 MR. BAKER: \-- on how frequent students

18 are using that web site? Checking their stuff?

19 MS. HALL: Oh, I, we\'re up in the, I don\'t

20 know. I haven\'t recently but it\'s, it\'s pretty

21 large. I mean, I know it would be large and I\'m sure

22 I can get that data if you needed it.

59

1 MR. BAKER: So, they use it?

2 MS. HALL: Oh, yes. Absolutely.

3 MS. JOERSCHKE: And they just redesigned

4 it on our \--

5 MS. HALL: They just redesigned it \--

6 MS. JOERSCHKE: \-- campus as well.

7 MS. HALL: \-- and went on \--

8 MS. JOERSCHKE: Just to enhance it.

9 MS. HALL: Enhanced. And our problem is

10 that we, there is just so much in the whole

11 technological realm that we\'re always facing that

12 prioritization and, you know, there\'s much more I

13 want to do but the way I\'m with the students, you

14 know, right now they can go in and then check their

15 missing information and print it out. I want to

16 upload it directly into our system but, and we know

17 how to do all these things it\'s just we can\'t spend

18 the time, you know, prioritized. And financial aid,

19 as I keep trying to tell everybody, financial aid

20 cannot always be first. And yet we have the fine

21 line that we\'re, oh, well, it\'s not on the record.

22 Really, realistically we are, we laugh

60

1 about this is. And we say, well, there are nine pigs

2 at the trough. And the eight are backed in the

3 school. The ninth is the student services. And the

4 student services has 13 departments and we\'re,

5 actually, we\'re, they\'re nine thieves and we\'re

6 piglets and we\'re trying to get in there and eat.

7 And so, but, I mean, we obviously, we can get

8 priorities when we need to. Like we did this last

9 year with the \-- we said we\'ve got to get the money

10 to the student\'s account. And that was the biggest

11 improvement in financial aid, not coming direct from

12 the direct financial aid but \-- give the money, get

13 those lines out of that hallway where the

14 administration is. High them or get rid of them. So

15 we got rid of them.

16 So, you know, I think we\'re now rippling

17 back to the financial aid saying we\'ve got to

18 automate alternative loans. We\'ve got to, special

19 programs and I thing nobody can really fathom the

20 manual stuff that has to go on. But we have

21 technology program, 13, 1500 kids around the State.

22 And we have study abroad. We have the Flight

61

1 Programs. We have medicine students. They all have

2 little wrinkles that they can\'t sit and flow with the

3 big picture.

4 So, we\'re faced with, and as I talk to

5 people so often, for years we\'ve spent time every

6 year in major things we had to do were change

7 account, change, change loans. You know, everything

8 was happening. Every year you\'d change it. You can

9 never focus on scholarships. I mean, horror. I

10 mean, and I know the government can\'t help us with

11 scholarships but we just need to do much more in

12 helping all of us benchmark how we manage these

13 scholarship funds because as we all get more, try to

14 get more gift aid because there isn\'t the federal,

15 we\'re all facing that we need to direct our data

16 staff to do all these special programs now and not

17 reinvent financial aid every year.

18 So, you know, I think it\'s good that we\'ve

19 done some of that but, and I\'m so happy with the

20 master promissory note. But it\'s like I want one

21 year that we can just sort of look at these other

22 things because we don\'t have enough resources to get

62

1 it all done.

2 I don\'t know about your school, but I\'m

3 sure your financial aid office offer special programs

4 and things that they can, if they had the resources

5 they can automate more of it.

6 MS. JOERSCHKE: Right.

7 MS. VETA: Tell us more about how the

8 master promissory note is working.

9 MS. HALL: Well, we\'re not using it this

10 year because we had some major things going on with

11 the money going to students accounts. We decided

12 that we would wait and do it in the course of this

13 year.

14 MS. GARCIA: Actually \--

15 MALE VOICE: I\'m sorry, go ahead.

16 MS. GARCIA: Oh, I\'m sorry. No, actually

17 I was going to say we have not actually started. We

18 will be starting it in December. You run by quarters

19 instead of semesters so we will be starting it. But

20 I think it\'s going fine.

21 MR. BAKER: You\'re in a FFDL?

22 MS. GARCIA: Yes.

63

1 MS. ABADINSKY: I don\'t know whether REF

2 is \--

3 MR. BAKER: Yes, you are because the

4 direct loans is only one.

5 MR. LEVITT: Yes, it\'s working really well

6 for us.

7 MS. VETA: You\'ve actually implemented

8 this?

9 MS. HALL: You can see the benefits in the

10 second year.

11 MR. BAKER: Second year \--

12 MR. LEVITT: Yes, we started this fall.

13 MR. BAKER: This year, because it\'s the

14 second loan you don\'t have to get it \-- but any, any

15 sense from the students that they\'re a little uneasy

16 about signing a note that doesn\'t have any dollar

17 amounts on it?

18 MR. LEVITT: That was one concern that

19 was, that kept cropping up but it was, it wasn\'t like

20 a large number of students that were; I think the

21 students were more concerned of either, of course,

22 number one paying their tuition bill off or getting a

64

1 student loan refund. But, yeah, we haven\'t had, very

2 little complaints when it comes to it. It\'s just

3 been really working well. We\'re real happy with it.

4 MR. BAKER: Think about it in the future,

5 how do you think, what do you think the reaction of

6 these students next year when, you\'ll send them an

7 award letter with a loan on it and \--

8 MS. HALL: They\'re going to love it.

9 MR. BAKER: \-- some will be calling you up

10 and saying, my note must have got lost. That\'s a

11 problem but. And then the money would just show up,

12 right?

13 MR. LEVITT: Yes.

14 MR. BAKER: Do you require award letters

15 to be returned where they say, yes, I want the loan?

16 MR. LEVITT: We\'re still, we\'ve kind of

17 mirrored the; because as you know we was in direct

18 loan and then went back to the FFEL Program. But we,

19 we send out a loan request form. On our award letter

20 on the bottom there\'s an eligibility that states this

21 is what you\'re eligible for sub or unsub or plus.

22 And then a loan request form is sent to them with

65

1 that and then they send us back, actually, we

2 recommend what, you know, what they\'ve indicated is,

3 ours. We recommend what we think they need to cover

4 their cost. And then they send, sign it and send it

5 back.

6 MR. BAKER: Let me ask, one more follow-up

7 in that. And I\'ll get to the other folks, too.

8 Cliff, do you have any sense of people who, if I have

9 this right, they\'re eligible for a loan when you\'re

10 giving them this amount.

11 MR. LEVITT: Uh-huh.

12 MR. BAKER: That \--

13 MS. GARCIA: We see our students

14 personally. We have a small, you know, a small

15 student population so we, we do everything with the

16 student. So we would have them sign the award letter

17 with us.

18 MR. BAKER: So if they want to decline a

19 loan or \--

20 MS. GARCIA: Decline a loan.

21 MR. BAKER: \-- or understand it more you

22 go through all of that.

66

1 MS. GARCIA: Right.

2 MS. VETA: Does that ever happen?

3 MS. GARCIA: It does, when they decline a

4 loan? Yes, it does happen. We\'ve had some students

5 who wish to make some payments or otherwise if

6 they\'re getting an outside scholarship that they know

7 or a tuition reimbursement. That\'s normally when

8 they decline the loan.

9 MR. LEVITT: We\'ve set up our system to,

10 when we started setting up the master promissory

11 note, if they had previous loans with us and where we

12 could actually incorporate; what we\'re doing is we\'re

13 importing our, the information of the Icer into our

14 PS400, which is our work horse. It\'s, you know, how

15 the students look up their accounts and that kind of

16 a thing. And what we\'re, what we\'re doing is we\'re

17 going to, every time we send out an award letter to a

18 student, and we\'ve actually started doing this, we

19 tell them what their in debt, what they owe. It\'s

20 one \--

21 MR. BAKER: It\'s one of the LNSD stuff

22 that we sent.

67

1 MR. LEVITT: Yes.

2 MR. BAKER: Oh, that\'s neat.

3 MR. LEVITT: Yeah, it is. And it really

4 works well because we\'ve noticed that the student is

5 taking more of the recommended amount rather than the

6 full amount. We go, holy smokes, I\'m ten grand in

7 debt, you know. I better not be taking the full

8 amount any more and just take what I need. So we\'ve

9 noticed a shift towards that where the student

10 doesn\'t take the full amount of the, as much as they

11 used to.

12 MR. BAKER: Would the next neat thing from

13 that be that they go to web software, we tell them

14 what the monthly payments will be at that amount?

15 MR. LEVITT: We do have the Calculator

16 available on our web site form. So, we\'re pretty

17 proud of the fact that we were at 19 percent with a

18 default rate three or four years ago. Now we\'re down

19 to 12. And I think we\'re going to hit ten this year

20 because we, we\'ve really made an effort to make the

21 student aware of what their borrowing and that kind

22 of a thing. So it\'s really worked out well for us by

68

1 using the web stuff and the NSLDS information and all

2 these other things combined. It\'s really done a good

3 job with our students.

4 MR. BAKER: And this year is next week,

5 you know, the \--

6 MR. LEVITT: Yeah, yeah. We\'re counting.

7 We\'re hoping. I have a, can I ask you a couple more

8 questions that I, just to follow up with Joyce. Ever

9 since we put our information out there on the web for

10 our students, our office phones have been ringing a

11 little bit more because the students call and make

12 any access or information and they\'re calling a

13 little bit more now and saying, hey, what\'s this \$25

14 late fee I have on there. You know, those related

15 kind of things.

16 But on the Title IV refund policy that\'s

17 going to be coming out, is the Department going to

18 come out with a work sheet? Or they aren\'t going to

19 come out with them?

20 MR. BAKER: Electronic and paper. It\'ll

21 be a web site.

22 MR. LEVITT: Fabulous. Is there any shift

69

1 in the thinking of having the student pay back Title

2 IV funds yet? I mean, is that going to be, do you

3 think that\'s going to change at all? I know that

4 we\'re going to, at Baker, we\'re going to, if the

5 student owes money, say, on a telegram, we\'re going

6 to probably end up eating that and trying to get them

7 to our collection procedure. Do you see what I\'m

8 saying? Because we don\'t want to put the student

9 into overwork.

10 MS. VETA: And all we can say on that,

11 since we haven\'t come out with our final regulation,

12 is, you know, we\'re not in a position to share with

13 you what we\'re going to do. It\'s a very difficult

14 issue. Some very good points have been made by

15 schools about the concerns that they have. By the

16 same token, we need to take a careful look at the

17 statute and it\'s a very difficult issue.

18 MR. LEVITT: Is there, is there any

19 possibility or shift in thinking of eliminating the

20 Motor Folder requirement? At Nasa it was, I don\'t

21 know if you were at that session that they were

22 talking about that, but it was kind of across the

70

1 board on how schools felt that they had to deal with

2 this or comply with this regulation. And some

3 schools were indicating that they were going to just

4 put them in the high student volume areas like the

5 Academic Office, you know, the Business Office,

6 Financial Aid Office. And other schools felt that

7 there actually had to be some type of a mailing. Now

8 \--

9 MR. BAKER: The requirement is totally

10 statutory and, in addition are we talking about,

11 there\'s a, I think there\'s the last part of it says,

12 in the law it says no employ of the Executive Branch

13 may provide guidance to schools as how to implement

14 this. Something like that. So we can\'t answer your

15 question.

16 But I would say that the words are, I

17 believe, we can check it, make available.

18 MR. LEVITT: Make available.

19 MR. BAKER: And I think the purpose of

20 that last statement of keeping us out of it is, it

21 says make available.

22 MR. LEVITT: Okay.

71

1 MR. BAKER: I don\'t think I violated the

2 provision.

3 MR. LEVITT: We can\'t represent you

4 anymore but your witness is credible. Thanks.

5 MR. GETTE: One of the things I wanted to

6 come back to for quite a while was you were

7 mentioning experimental sites. And we\'re actually

8 kind of getting to the point where experimental

9 sites, I think just came out with some findings

10 recently. And I think we\'re thinking as the

11 Department, what\'s the next step? I mean, do we just

12 continue having experimental sites forever or should

13 we do something with this information? What, other

14 than that one item that you mentioned, were there

15 other things you learned from having experimental

16 site authority that you thought were useful that

17 should be looked at more broadly?

18 MS. HALL: I mean, I was hoping that the

19 data that went into the Department from the schools

20 was showing that it was, the regulations were not

21 worth while. And, so, some of them, in the interim,

22 that we got relief on and re-authorization got

72

1 addressed, and I don\'t know if they got addressed

2 because of the feedback or what. But, you know,

3 holding the check for a freshman.

4 MR. BAKER: Versus a third year person.

5 MS. HALL: Yeah.

6 MR. GETTE: Yeah.

7 MS. HALL: So we were exempt from that. I

8 could have told you that, you know, a limited amount

9 of people and you\'re really hurting 90 percent of the

10 people or 95 for these five. So that one and the 300

11 single disbursements, pro-ration.

12 MS. JOERSCHKE: Right. It\'s probably less

13 than one percent, you know, of the total loan buying

14 you have that are even in it versus students.

15 MS. HALL: And so we hope that the

16 Department keeps the experimental site capability

17 there so that you can get some data from some schools

18 as to what\'s going on with some regulations.

19 MR. BAKER: Uh-huh.

20 MS. HALL: But that can be from a

21 traditional school, too, you know. Some of the

22 people that are, you know, maybe preparatory

73

1 institutions all may not be seeing the kind of the

2 thing that a traditional school\'s seeing.

3 MR. BAKER: That\'s why experiments have to

4 be broad based experiments.

5 MS. HALL: Right.

6 MR. GETTE: Yeah. Would, I\'m just kind of

7 thinking out loud now, I mean, you\'re talking about

8 the 30 day delay and the single disbursement which

9 now \--

10 MS. HALL: \-- award, yeah.

11 MR. GETTE: \-- which now is statutory.

12 MS. HALL: Yeah.

13 MR. GETTE: And I\'m wondering whether that

14 \--

15 MS. HALL: We\'re still doing the data

16 collection.

17 MR. GETTE: \-- there\'s any correlation

18 whether, whether those ideas grew out of the

19 experimental sites or not.

20 MS. HALL: Well, I think it did because I

21 sat in that NASFA re-authorization and we hammered on

22 those, you know, and forwarded them on to the

74

1 Department. So, I think those of us who were

2 experiencing really felt that it should go in re-

3 authorization. So, we want to see, I mean,

4 selfishly, experimental sites because I think it\'s a

5 creative process, too. We do have difficulty finding

6 time to actually sit down and talk about what is it

7 we want, you know, relief from, believe it or not.

8 But you don\'t know what people could come up with.

9 Again, if you don\'t have a Project Easy then have,

10 you know, a group that can sort of think creatively

11 to say well, we ought to be excluded from that. I

12 mean, let us try it out.

13 MS. ABADINSKY: We\'re an experimental

14 site for exit interviews. We\'re exempt from doing

15 that. We\'ve got an alternative system for providing

16 web based financial counseling. And our default

17 rates have decreased over the years. So those,

18 obviously, getting rid of exit interviews did not

19 have a negative impact and what we\'re providing does

20 a much better service for our students. And we would

21 like to definitely see experimental sites continue.

22 And if we could come up with new ideas that might

75

1 work.

2 MR. BAKER: Yeah, the first half doesn\'t

3 really easy.

4 MS. JOERSCHKE: Uh?

5 MR. BAKER: The first half doesn\'t \--

6 MS. HALL: Well, could I just say one

7 thing and I\'ve told this to the Administration on our

8 campus. To choose to be an experimental site is

9 relief for the student. It is not relief for the

10 Financial Office because the data correctioning. But

11 we were happy to do that. For us, it made more sense

12 for us to do that than to run a bunch of students

13 through things who, so, that\'s another reason. Don\'t

14 think that schools are doing it so they can go, ooh,

15 ah. It\'s more work for us. And most of us did not

16 get extra resources to do that. I think I got a

17 grad, I didn\'t get a grad student for that.

18 MS. ABADINSKY: I mean for us, we were

19 going to provide this counseling whether or not we

20 felt this was good service to our students. And we

21 have a high risk population that we serve. What it

22 allowed us to do, though, was to make enhancements

76

1 that maybe we would not have otherwise made if we had

2 to continue going through the exercise of putting

3 these exit interview packets together and mailing

4 them out and checking if they got returned.

5 MS. VETA: I want to welcome the newest

6 member to our group to say I\'m Jean Veta co-chairing

7 this on behalf of the Department here with my

8 colleagues, Jim Gette and Jeff Baker. And what we\'ve

9 all done is just introduced ourselves and where we\'re

10 from. If you feel comfortable doing that.

11 MR. JAROSON: Yeah. My name is John

12 Jaroson. I\'m representing the case management team

13 here in Chicago. Douglas Parrott would be here but

14 he had a conflict. He will be here, though, if the

15 meeting goes on. And I just found out this morning

16 that he would like me to be here. So I apologize

17 for; but I\'m the co-team leader in the case

18 management team here in Chicago.

19 MS. VETA: Great.

20 MR. JAROSON: So, thank you.

21 MR. LEVITT: Jim, just to follow-up on the

22 experimental site.

77

1 MR. GETTE: Uh-huh.

2 MR. LEVITT: We\'re not one, of course, but

3 one of my colleagues that work on one of the

4 committees with me, her school is Michigan State

5 University and they are very happy with it. She says

6 they are very happy with it and they would hate to

7 see it end. She says that for the student it\'s

8 really worked out well.

9 MR. GETTE: Do you get the sense that

10 there are new ideas that are still coming on line

11 through the experimental site program?

12 MS. HALL: I think there\'s confusion about

13 there, from people knowing whether they can submit

14 them or not. And I guarantee you, if we can sit down

15 and find some time to meet with people. But we\'re

16 too busy processing aid. We can probably come up

17 with some more.

18 MS. JOERSCHKE: It\'s also a little more

19 difficult right now because like initially the

20 quality assurance schools went together under a

21 consortion, under their umbrella. And the direct

22 lending schools, you know, you\'re all together

78

1 looking at issues and then coming forward with your

2 proposal. But if you\'re an individual institution or

3 even a group of regional schools trying to come

4 together, it\'s really a different issue than it was

5 initially.

6 MS. HALL: But I think people are not sure

7 that they could even submit them right now. And

8 could we talk about distance education?

9 MS. VETA: Definitely.

10 MR. GETTE: Please.

11 MS. HALL: Well, I know you have your

12 demonstration sites and maybe we need to deal on that

13 one. I don\'t know. I think we are struggling in

14 Indiana with distance education. And I think right

15 now financial aid people are under a lot of pressure

16 that I don\'t believe that they need to be under. As

17 if they\'re dragging their feet. They\'re not with the

18 program. They\'re, what\'s another word? There are

19 several words that I feel are appropriate that we\'re

20 not thinking out of the box. We\'re not capable of

21 thinking out of the box because we have these

22 regulations that we must adhere to. So, I\'m

79

1 expecting maybe a little war somewhere here shortly

2 because people are trying to define and yet they\'re

3 not demonstration sites. So, for

4 instance, how do you do away with the home school

5 concept? Right now in Indiana we have the home

6 school. And as hard as it is to work with that, at

7 least the home school\'s doing the financial aid. So

8 they want to talk about the concept of doing away

9 with the home school. What does mean? And how does

10 that, then who gives the financial aid?

11 So, you know, we pretty much, we have,

12 we\'re going to put together, there\'s a nice document

13 somewhere that people in the government have put

14 together on distance ed, was it, who put that

15 together? Was the DOA?

16 MS. JOERSCHKE: It was the individual from

17 Colorado \--

18 MS. HALL: Colorado, when they did.

19 MS. JOERSCHKE: \-- with the \--

20 MS. HALL: Line item, all the things. So

21 we at least think that we\'re going to take that with

22 us to the meetings so that these folks, on the

80

1 academic side, realize that we, yeah, we have to meet

2 the regulations, sorry. But unless you want to be a

3 demonstration site, we\'re going to have to continue

4 to meet the regulations.

5 MS. VETA: What are the biggest hurdles?

6 MS. HALL: The biggest hurdle is, for us I

7 think, several. One is the whole registration

8 process. Doing it in a difference place and not

9 being part of the mainframe. So, if all of your

10 financial aid programs are looking at a main frame

11 system and those kids aren\'t there, how are you going

12 to find them? So we keep saying they should look

13 like a regular student so we can do all the

14 reporting. And they, the old systems aren\'t as

15 flexible because they\'re old systems. So they want

16 to do it out of Life Long Learning which is more

17 flexible because over time Life Long Learning in

18 continuing ed, you know, kids can bop in and people

19 can bop in for three courses and whatever.

20 So, then there\'s pressure to have people

21 admitted through that area, not through regular

22 admission. Not registered through the regular area

81

1 and not billed through the regular area. And I keep

2 telling them, with all the refund, repayment and all

3 that we have to do, I cannot run a separate system

4 over here on the side to, you know, because it\'s all

5 Works over here. But then the flexibility of three

6 courses are from IU, two courses are from Purdue, one

7 is from Ball State. Who does the aid? So, I\'m at

8 the point where I\'m telling them maybe you need to

9 get your own DOE code and be a school. Maybe that\'s

10 what, maybe it\'s just unique to Indiana. They\'ve

11 been trying to run it on a home school concept.

12 And, you know, if the kid was getting a

13 script from Purdue, one semester, all the courses

14 might be through distance out of Ball State. But he

15 might produce students so I\'m doing the financial

16 aid. But if you do away with the home school, I\'m

17 having trouble figuring out who\'s going to do the

18 financial aid.

19 MS. VETA: But in hearing that \--

20 MS. HALL: Dilemma.

21 MS. VETA: \-- thinking about to what

22 extent are those struggles within your university

82

1 system and what is it that the Department of

2 Education is doing where, that you think should be

3 doing differently.

4 MS. HALL: Well, I don\'t know. I just

5 throw it out there as the next, I mean, this is

6 really starting to be some real struggles with

7 everybody. And we know that demonstration site. So

8 we really do need to watch that closely and, you

9 know, I don\'t know if the time frame for being a

10 demonstration is not as flexible maybe as it could be

11 because I think some people, again, you know, came

12 out and boom. You know, it seemed like some people

13 were lined up to be demonstration sites like that and

14 some of the rest of us out there are not. I mean, we

15 are a part of Western Governors and Western Governors

16 demonstration site, Indiana joined that. But I don\'t

17 think we have any benefit to say we\'re a

18 demonstration site in Indiana because of that.

19 So, it\'s, that whole process, it\'s not

20 real clear or will there be another opened period for

21 demonstration sites. But, the whole thing, I don\'t

22 have all the regulations so \--

83

1 MS. JOERSCHKE: I think what Joyce is

2 trying to say is that those, obviously, through re-

3 authorization, demonstration sites were given some

4 relief.

5 MS. HALL: Right.

6 MS. JOERSCHKE: Regulatory relief so

7 they\'re spelled out in regulations. But I don\'t

8 believe, unless other institutions are aware of this

9 other information that came out through the Colorado

10 Round Table experience, this other piece of

11 information that says blah, blah, blah, blah. These

12 are the problems. These are the regs. This is what

13 you\'re confronted with if you were to develop some

14 type of distance learning situation at your

15 institution or within your state. And that\'s what

16 people in our state are dealing with because we have

17 this information but \--

18 MS. HALL: It\'s only because \--

19 MS. JOERSCHKE: \-- I\'ve got it with me.

20 MS. HALL: \-- it\'s not readily available

21 nor is financial aid understood by all the people

22 starting the program on the academic side. And I

84

1 don\'t think it\'s just unique to Indiana either. You

2 know, so I think maybe some education.

3 MS. JOERSCHKE: And you can\'t just send

4 people \--

5 FEMALE VOICE: \-- start popping up

6 programs here and there.

7 MS. HALL: Yeah. I think some, some

8 leadership from the Department as opposed to

9 individual financial aid directors trying to go at

10 people. If there were some context at that higher

11 level to get them to understand this is where

12 financial aid is right now and these are the

13 requirements that you will have to meet to be a

14 distance ed, assuming you\'re not a demonstration

15 site. Because what you\'re going to have is you\'re

16 having the financial aid people individually fight

17 people around. And then not understanding, if

18 haven\'t been in financial aid, you couldn\'t fathom,

19 you can\'t fathom that complexity of some of that

20 thing. And so, academic side sometimes thinks that

21 you can just, you can just do this and turn on a

22 dime.

85

1 MS. JOERSCHKE: And you\'re expected to.

2 MS. HALL: And they\'re expecting it. So I

3 think, I just think there could be a little more

4 leadership from the Department of Ed to let all

5 distance education areas know what the regs are in

6 financial aid. There could be other regs, too, that

7 relate so that they know that they, and clearly

8 summarized this is why you have to do it. It isn\'t

9 the Financial Aid office or whomever out there just

10 trying to be obstinate.

11 MS. JOERSCHKE: It\'s a really big issue in

12 the United States. The professors are feeling the

13 crunch, you know. They\'re having to develop programs

14 that are, you know, going out across the country. It

15 really is a big issue and they have the pressure to

16 produce. While on the other end, the schools need to

17 finance the student\'s education in some way. And

18 they don\'t necessarily mix. And so what we\'re saying

19 on one end as a, you know, the problems with

20 financial aid with the regulatory problem, it doesn\'t

21 match what\'s going on in terms of the way the

22 institutions are trying to move forward and be

86

1 competitive in the nation. And even internationally.

2 So, naturally, we\'re the ones that are looked on as

3 the bad guy.

4 MS. HALL: And believe me, I keep telling

5 people, that\'s not a problem. I, you know, I\'ve been

6 the bad guy many times. But on this particular

7 issue, I don\'t think we should be. And if we can

8 just get more knowledge base and you can say, well,

9 Joyce, then you go give it to them. But there\'s

10 just, I think the Department would have a little more

11 authority, if you will, and ability to make people

12 show up to understand what is required and what

13 they\'re doing.

14 MS. JOERSCHKE: Well, on the other hand

15 too, I think that people, I\'d hate to see schools

16 being set up for failure just because the

17 administration is forcing them financial aid offices

18 to do something that they really shouldn\'t be doing.

19 And, quite frankly, at some institutions around the

20 United States that very well may happen because the

21 Financial Aid officer is not considered, you know,

22 high enough among the administration to make those

87

1 decisions. And they do what they\'re told to do.

2 MR. BAKER: I think there\'s a, number one.

3 There\'s really two good resources you can check into

4 for your distance education program. One person

5 would be Ellen Black at NASFFEL and the other person

6 would probably be either Marian Phelps or Cheryl

7 Liebowitz. They\'re great people to consult in

8 distance education programs. We\'re doing some

9 distance education and we have students in Greece.

10 So it is becoming a major concern. But in the

11 Department\'s defense, after, I went to the round

12 table. And in the Department\'s defense, it\'s a mind

13 set, I believe, with our legislature, legislators. I

14 think that\'s really where the problem lies because,

15 and correct me if I\'m wrong, but I believe they have

16 a mind set of the old correspondence schools. And I

17 think they think that distance education isn\'t a

18 viable way of delivering education.

19 I shouldn\'t say all of them, but I know

20 there\'s major concerns amongst a lot of them when it

21 comes to how they view distance education.

22 MS. HALL: Could I just say something real

88

1 quick here? It\'s not, I hope that no one thinks I\'m

2 attacking the Department of Education on this. But I

3 don\'t think the Department, I mean, I totally agree

4 with what you\'re saying.

5 MS. VETA: I heard you to say this is a

6 new involving area that we all need to work together

7 \--

8 MS. HALL: \-- more leadership and \--

9 MS. VETA: Right.

10 MS. HALL: \-- and we can use some help

11 here on this one.

12 MS. JOERSCHKE: Well, and I think it\'s

13 moving in the right direction with the demonstration

14 side.

15 MS. HALL: Yeah.

16 MS. JOERSCHKE: And I think that it\'s

17 going to, you know, as you introduce more and more

18 schools to it and \--

19 MS. HALL: But here\'s the dilemma. The

20 dilemma is, and this is a good thing, distance ed is

21 moving fast. And more and more pressure to move fast

22 and I don\'t know if that demonstration site is going

89

1 to move fast enough. And that\'s part of the loop is

2 because people are in the next two or three years are

3 being pressured to get this straightened out on this

4 financial aid and everything else so that you can

5 grow and do this distance ed when we don\'t even have

6 the regs straightened out. So that\'s what I\'m

7 saying. We\'ve got to get this clear to these folks

8 that you may have to make some decisions to do them a

9 differently on your campus for the short term until

10 we get more data. And that\'s what people aren\'t

11 right now willing to do. They just want to gloss

12 over it and let\'s do it through continuing ed. It\'s

13 not \-- and it is.

14 MR. GETTE: It sounds like, I mean, to

15 some extent you\'re suggesting a little bit of an

16 education process.

17 MS. HALL: Yeah.

18 MR. GETTE: To help, help you all as

19 financial aid administrators deal with the issues on

20 your campus. We, I mean, this is going to be a tough

21 issue continuing, on a continuing basis because of

22 the speed at which the internet is going to propel

90

1 this area. So, I hear what you\'re saying.

2 MS. HALL: But I\'m not sure you have the

3 staff resources to go to 3500 schools. I mean, so, I

4 guess I\'m figuring, you know, I don\'t know how you do

5 it. If you do it through seminars and invite the

6 distance ed people, you know.

7 MR. BAKER: As an association \--

8 MS. HALL: That run the program and the

9 financial aid people.

10 MR. BAKER: We set up intersessions by,

11 you know, like each conferences and that kind of

12 thing.

13 MS. HALL: Well, and we continue to do

14 that so we\'re sort of, we\'re chipping away at it.

15 Those distance ed folks are not a financial aid

16 company, believe me. They will come because they\'ve

17 got their conferences to go to so are there some

18 conferences that those folks that we can get Cheryl

19 Liebowitz and Ellen Blackman and some people like

20 that that could say this is how you\'re going to have

21 to do it. In the interim, you\'ve got to meet these

22 criteria.

91

1 MR. BAKER: There\'s two things going on

2 and it\'s really, I feel bad for the schools and the

3 students. And both of them are bad. One is the

4 schools are taking their best shot at how to do \-- I

5 mean, I don\'t want to read my scribbling here. Maybe

6 some of these are just; and they\'re going to make

7 mistakes. And so we, do we put them in some sense of

8 \-- and what becomes of it is a different issue.

9 The other one is because of that concern,

10 the schools are not providing student aid to these

11 distance learning students. And so that\'s, that also

12 is a technical violation but more importantly for

13 all, is the issue that these students are otherwise

14 eligible and ought to be getting it. And then you\'re

15 getting this pressure from the business learning

16 folks who are saying \--

17 MS. HALL: Get with the program.

18 MR. BAKER: \-- your instruction \--

19 MS. HALL: Yeah, get with the program.

20 MR. BAKER: \-- and all this kind of stuff,

21 saying nasty things about us and so it\'s a real

22 challenge. And it\'s not like everybody, that the

92

1 demonstration program was a pilot. This stuff, I

2 mean, it\'s a demonstration project but meanwhile,

3 it\'s going on.

4 MS. HALL: Yeah, it\'s happening.

5 MR. BAKER: It\'s not stopping. This is

6 going on whether we have a project or answer these

7 questions or not. It\'s a tough one.

8 MS. HALL: Yeah. I mean, we just see that

9 as something that really needs some thought.

10 MR. BAKER: Yeah. We need to work, there

11 are associations. They\'re pretty well organized, as

12 a matter of fact. And we need to make sure we\'re

13 involved with the community, joint things,

14 Department\'s state and regional associations,

15 everything.

16 MR. GETTE: There\'s a good web site out

17 there, too. I don\'t have the address but if you give

18 me your card I\'ll e-mail it to you and it\'s

19 everything that\'s going on in distance education.

20 MS. HALL: Oh, great. We need that.

21 MR. BAKER: I wonder if they have a

22 financial aid page to that?

93

1 MR. GETTE: I didn\'t notice one.

2 MR. BAKER: Because we could work with

3 whoever \--

4 MS. HALL: Yeah, sure. Could be. That\'s

5 great.

6 MR. GETTE: Other ideas or thoughts that

7 are on your mind?

8 MS. HALL: I think we covered a lot of

9 them.

10 MR. BAKER: I just want to ask you a quick

11 question on the alternative loan program.

12 MS. HALL: Oh, yeah.

13 MR. BAKER: Couldn\'t the institution

14 contact these lenders and say, we\'ll be glad to

15 participate but here\'s our conditions?

16 MS. HALL: We\'ve tried.

17 MR. BAKER: Or do you get students

18 regardless? MS. HALL: We tried. You

19 mean contact the banks?

20 MR. BAKER: Yeah, and say, you know \--

21 MS. HALL: Well, there\'s a hundred. I

22 forget how many alternative loan programs there are

94

1 now. There\'s probably a hundred, aren\'t there?

2 MR. BAKER: Yeah, I remember this \--

3 MS. HALL: Trying, yeah, trying to get all

4 those folks. We\'ve tried on the ones that wanted to

5 exclude the financial aid office. And really got

6 nowhere. They just still exclude us. So, they just

7 weren\'t interested. But then all of a sudden the

8 checks started showing up at our school.

9 MR. BAKER: Right, so they came to school.

10 MS. HALL: So now I told them, we haven\'t

11 gotten to the second bank. We do know two banks.

12 They\'re large banks that we\'ve, first one said, okay.

13 We\'ll stop sending them to your campus.

14 MR. LEVITT: And when they do send those

15 checks, too, we don\'t know whether to refund the

16 money to the student or leave it on their account.

17 MS. HALL: Well, you don\'t know if, first

18 you got to figure out what it is.

19 MR. LEVITT: Right.

20 MS. HALL: And then is it a loan? Is it a

21 grant? Is it a scholarship? Now, we think it\'s a

22 loan and \--

95

1 MR. BAKER: Is this the student or is this

2 the parent on the co-pay loan?

3 MS. HALL: Yeah, student. And usually

4 it\'s the student.

5 MR. BAKER: Do they ask you to certify

6 anything beforehand or is it \--

7 MS. HALL: No.

8 MR. BAKER: \-- mostly just the \--

9 MS. HALL: No, absolutely no contact with

10 the school. The student goes in on-line, completes

11 their app and it\'s done. And the money shows up.

12 They didn\'t ask the cost of attendance or what their

13 financial aid was. Got a student with a \$15,000

14 check sitting here. It just blows my mind.

15 MR. GETTE: Probably too much capital

16 running around this country.

17 MR. JAROSON: Do they have to start paying

18 the money back instantly?

19 MS. HALL: The alternative loans, it

20 depends on which one. Some are, let you defer.

21 MR. JAROSON: I\'ve not heard of this one

22 that\'s why I\'m wondering.

96

1 MS. HALL: Yeah, some, some let you defer

2 and capitalize and some, I think they all are

3 starting to give them an option.

4 MR. JAROSON: What\'s the interest rate?

5 Do you know?

6 MS. HALL: I have no idea.

7 MS. JOERSCHKE: It would be a very

8 competitive.

9 MR. LEVITT: They are very competitive.

10 MS. HALL: They look competitive until you

11 start figuring out what \--

12 MR. LEVITT: They charge up front fees and

13 stuff.

14 MS. HALL: Up front fees and some don\'t.

15 The kids can\'t figure that out either.

16 MS. JOERSCHKE: But they don\'t understand.

17 The students and their parents, they\'re just taking

18 what comes out.

19 MR. LEVITT: Yeah, we had a bank get

20 really ticked at us because we got a check for, it

21 was like for \$18,000 and we put it in this student\'s

22 account and we paid off their current bill. And

97

1 then, you know, I guess maybe it\'s the financial

2 aid mind set, you want to get rid of the credit

3 balance right away. And we did and they called us

4 and asked us if we refunded the money to the student.

5 And we said, yeah. And they said, no. That was

6 supposed to remain on the account, like, you know,

7 we\'re really supposed to know something like that.

8 So this student walked off with like 11 grand.

9 MR. BAKER: And how do I sign up for this?

10 MR. LEVITT: Exactly.

11 MR. GETTE: Well, they\'re not checking

12 with the schools.

13 MS. HALL: I know.

14 MR. BAKER: That\'s true.

15 MS. VETA: Maybe we can share with the

16 group some of the other issues that were raised in

17 the Washington session.

18 MR. GETTE: I thought maybe \--

19 MS. VETA: Take a break?

20 MR. GETTE: Take a break. And then share

21 a few of the ideas.

22 MS. VETA: Sounds great. Why don\'t we

98

1 come back in about 15 minutes?

2 (A 15

3 minute break was taken.)

4 MS. VETA: All right. Let\'s get started

5 again and what we thought we would do is share with

6 you the kinds of issues that had come up in the

7 session held in Washington and getting comments and

8 reactions you have.

9 MR. GETTE: Our first, I\'m going to skip

10 our first session because it tends to be a fairly

11 specialized. It was geared to our lender issues. I

12 figure I\'d try and zero in on ones that you might be

13 a little more interested in. So, we can start with

14 the loan issues. One of the issues that we heard a

15 lot about was the cohort fall rate regulations.

16 Everything from some specifics regarding some

17 revisions to the change of ownership issues that

18 relate to cohort fall rate mostly generated from

19 preparatory schools where I think that that\'s more of

20 an issue, although, there was some issue of change of

21 control issues outside the cohort area for state

22 institutions that were raised as well. But in the

99

1 cohort arena it seemed to be the preparatory schools

2 were most interested in the change of ownership.

3 But then there was also to the much

4 broader on cohort fall rate which was that there\'s

5 simply, it\'s a difficult regulation that\'s difficult

6 to fall, has differing deadlines and that

7 simplification and clarification of that regulation

8 would be useful.

9 MS. HALL: On cohort default rate?

10 MR. GETTE: Yeah. Any \--

11 MS. HALL: Well, I know for one thing I

12 think we put it in a re-authorization that we really

13 felt we needed 60 days when you get notice of what

14 your default is to appeal because it comes at a busy

15 time and before you now it, they\'re, or whatever the

16 dates are have past. And I think you recommended 45

17 and we said 60 would be better. It\'s difficult to

18 try to get the data and run it and find out, oh, yes,

19 that student really was enrolled and all that.

20 In fact, our guarantor could not, all we

21 get is, we got a big stack and buried in this stack

22 was the defaulter up here and there. We said, if you

100

1 could at least sort it to the top, you know. Next

2 step, get it to us electronically but \--

3 MR. GETTE: Right.

4 MS. HALL: \-- sort it to the top. And I

5 think they\'re trying to do that. I mean, that is,

6 just been a real bug-a-boo. So, anyway, we thought

7 60 days to appeal would be \--

8 MR. GETTE: And is that on draft process

9 because I\'m assuming you\'re not \--

10 MS. HALL: When it first comes out.

11 MR. GETTE: You\'re probably not

12 participating in the formal appeal process very

13 often.

14 MS. JOERSCHKE: No, it was the draft.

15 MR. GETTE: Okay. I think, I\'m trying to

16 recall, I think actually as this further

17 negotiations, didn\'t we talk about extending that

18 period to \--

19 MS. HALL: \-- 45 \--

20 MR. GETTE: 45?

21 MR. BAKER: 45.

22 MS. HALL: And we said 60 would be more

101

1 reasonable.

2 MS. JOERSCHKE: Yeah, we recommended 60 in

3 our letter.

4 MS. HALL: I mean, it comes out when we\'re

5 trying to get freshmen awards out and all the whole,

6 bringing up the system. Changing the system and all

7 of that. And so you\'ve got to find some time. And

8 then freshmen parents calling and everything, so,

9 it\'s just, even 45; any days more you can put on it

10 would be \--

11 MR. GETTE: All right. I know one of the

12 considerations, having negotiated this issue for us

13 as that the Department was the fact that we have to

14 now we\'re required to get finals out before the end

15 of the fiscal year which kind of boxed in the amount

16 of time, you know, in the middle.

17 MS. HALL: So you mean by July 1st?

18 MR. GETTE: No, by September 30th.

19 MS. HALL: September 30th. Well, I mean,

20 I think it comes out in March, doesn\'t it?

21 MR. GETTE: The draft does, yeah.

22 MS. HALL: And if you had 60 days from

102

1 that.

2 MR. GETTE: The problems come when you add

3 on the time for the guarantee agency to respond and

4 then do monthly submissions done as LBS and then re-

5 run the final rates. And the way we came up with the

6 time periods basically was we took the date that we

7 had to do the finals and then \--

8 MS. HALL: Backed \--

9 MR. GETTE: \-- kept backing up to the

10 point where we, you know. So, but we heard that in

11 the negotiating rule making. We\'ll continue to look

12 at that issue.

13 In terms of the electronic process as

14 well, I mean, there is a movement within the

15 Department to move toward providing you electronic

16 data. And I think we\'re actually not very far away

17 on that.

18 MS. ABADINSKY: You know, I actually

19 appealed our default rate this year and had an

20 interesting experience doing that. We knew we had a

21 lot of technical defaults. We had verified a lot of

22 our defaults with the clearing house. There were

103

1 students that were, who ran \-- both of our \--

2 population and our direct loan population.

3 So, based on instructions from \-- we went

4 ahead and sent letters both to our guarantors,

5 basically ISAC USA Group and also to direct loans.

6 ISAC indirect loans probably had a proportionate

7 amount of borrowers that we sent in. We just sent in

8 everybody and said, you know, we know there\'s, I had

9 a lot borrowers that were default direct current

10 FELP, vice versa. A lot of that stuff that just did

11 not make sense. So we appealed everybody to

12 everybody, essentially.

13 Got our response back from ISAC. Probably

14 had in the neighborhood of ten to 12 corrections made

15 by ISAC. Finally got this yesterday, the letter back

16 from Direct Loans and nobody. And I know based on

17 just what I went through with the clearing house

18 there\'s at least ten people on there that were

19 enrolled that even on appeal, Direct Loans did not

20 find as being current. So, I mean, I know the rates

21 are going to be filed. I know probably ten people

22 aren\'t going to do that much. If my rate is very

104

1 close to five percent we might have to talk about it.

2

3 But that was my experience with \-- so I

4 think there are problems with your Direct Loan

5 service or actually they are finding defaults because

6 I know some of them were clearly not. We put it to

7 the test.

8 MR. BAKER: They enrolled at your place or

9 someplace else or both?

10 MS. ABADINSKY: They, both permanently.

11 MR. GETTE: So these were clearly people

12 who should have been in deferment, the school

13 deferment \--

14 MS. ABADINSKY: And we just had so many

15 that were like default one program, not default the

16 other program. And we just begin to wonder.

17 MR. GETTE: Right. Okay. One of the

18 other issues, and again this was brought up

19 predominately by the preparatory schools was student

20 eligibility and treatment of modular courses versus

21 credit hours. And while they brought up the issue

22 there were others at the table who said even in the

105

1 traditional schools that this is becoming more of an

2 issue because the use of modular courses is becoming

3 more common. Do you see that at all instead of?

4 MS. HALL: When you say modular courses,

5 what do you mean? I\'m trying to understand what you

6 mean.

7 MR. GETTE: As opposed to carrying a full

8 credit, what would normally be, you know, four

9 courses for however many credits, they\'re teaching

10 them through modules that take you, you know. The

11 example the preparatory schools gave us, if you\'re in

12 a medical assisting program, you take anatomy. You

13 take billing, you take X-rays, whatever. And instead

14 of taking those all simultaneously, which add up to

15 your number of credits needed, you take them in

16 modular fashion so you finish one before you move on

17 to the next. An issue of being part or full time in

18 that status. And, as I said, it came up from the

19 preparatories but some of the traditional

20 institutions said that they were seeing movements to

21 start using some modular courses as well.

22 So that\'s not something

106

1 that, I\'m sensing that you\'re using at this point.

2 MS. HALL: We have a unique situation

3 with our flight students that, what are they doing?

4 They\'re, the can get, I think they can stock out and

5 go commercial. And then, maybe only have three hours

6 and, so what we did is was just work with a lender to

7 offer loans that aren\'t student loans to them because

8 they need some money because they don\'t get paid by

9 the commercial but they have to do it in order to get

10 their commercial rating or something like that. So,

11 I\'d say in that area, and we\'ve been able to get

12 around it by, the lenders are more than happy to come

13 in and do alternative loans at this point in time and

14 be flexible with the fact that these kids may go do

15 this for four weeks or five weeks and then come back

16 to school.

17 So there\'s a lot of pressure, we all, now,

18 there are not enough airline pilots so that\'s what\'s

19 happening is there\'s a lot of pressure to get them

20 through the program. But I\'m not seeing a lot of it.

21 I mean, of course, with distance ed, I think we\'re

22 going to see much more, you know, I know we talked

107

1 about the, instead of course hours, it\'s competency.

2 And you know, instead of getting a grade you get,

3 there are a hundred competencies to get this thing in

4 this particular area. So, when you do that instead

5 of credit hours so I think at some point we\'re going

6 to have to be doing financial aid based on

7 competency. I don\'t know how but \--

8 MS. JOERSCHKE: Well, that\'s one of the

9 issues.

10 MS. HALL: 75 percent of the Pel, it makes

11 75 percent of your competency out of it. So there\'s

12 some mind bending things out there, I think, that\'s

13 going to be pushed, driven by distance education.

14 MR. BAKER: Maybe we\'ll all be retired by

15 then.

16 MS. HALL: After they get their retinal

17 scan, they might, they\'ll have to determine, they\'ll

18 have a retinal scan so we know that they are in their

19 seat looking at the computer.

20 MR. GETTE: Loan counseling, exit

21 counseling. There was a recommendation made that we

22 start requiring or start providing information at the

108

1 exit counseling on actual loan indebtedness and

2 actual monthly payments as opposed to the average

3 data that\'s now required. I know you said that you

4 clearly are in a position to provide that information

5 at this point. Are others doing that? Would that be

6 a, do they see that as a TCS

7 positive \--

8 MS. HALL: Yeah, I think we\'re, we\'re an

9 experimental site when we do mail, exit material out

10 and it has their indebtedness. I can\'t remember if

11 we put their monthly payment. I\'d be surprised if we

12 didn\'t. But, yeah, I think the more we can do early

13 on, I liked his idea of the award letter, saying it

14 on the award letter.

15 The whole idea of debt, it scares me

16 because when we started packaging parent loans,

17 parents took them out. When we didn\'t package them,

18 they didn\'t take them out and our cost didn\'t change.

19 So, it\'s, it\'s, there\'s that disconnect. The parents

20 see that cost of education and if we can individually

21 talk to people we can make them understand that you

22 don\'t need to pay Purdue \$11,000 on day one. You\'re

109

1 going to travel here. You\'re going to buy books.

2 Then they understand. But when you say those award

3 letters out and say it costs \$10,000 and you\'re

4 eligible for a \$8,000 parent loan, they take it out.

5 I don\'t know what they do with the money. They take

6 it out.

7 So, we saw a real boom in our parent loans

8 but because our, all the other schools were packaging

9 it then we felt we had to package parent loan to need

10 because then they thought they weren\'t eligible for

11 the same type of aid at Purdue. So, I, it\'s

12 interesting to me that the, I\'d like to see

13 nationally how much parent loans went up over time

14 here, say five, six years ago when we all started

15 putting in our A packages.

16 MR. BAKER: Excuse me. When you send out

17 some exit packages with the total indebtedness?

18 MS. HALL: Uh-huh.

19 MR. BAKER: Where do you get those numbers

20 from?

21 MS. HALL: From our database.

22 MR. BAKER: So those were the only loans

110

1 that were done through your \--

2 MS. HALL: Uh-huh. But if they transfer

3 in, you know, from the Financial Aid transcript \--

4 MR. BAKER: So you are picking them up?

5 MS. HALL: Yeah, NSLDS.

6 MR. LEVITT: What we do, what we do, we,

7 being that we import the data in from, you know, from

8 the Department or whatever, from NSLDS, we\'ve

9 actually written a, and we\'re a little bit smaller

10 school. We\'re about 17,000 strong right now state-

11 wide. But we actually have written a software

12 program, our IS Department has written a software

13 program that goes in and selects fields off of the

14 ISIR record layout and then that\'s how we bring it

15 in. We bring it in and it actually goes through what

16 we call an awards grade. And that\'s how it prints

17 out on our award letters.

18 MR. BAKER: Have you found that the data

19 are generally pretty accurate?

20 MR. LEVITT: Oh, yeah. I mean, there\'s

21 always the exception.

22 MR. BAKER: Right.

111

1 MR. LEVITT: Most of the time.

2 MR. BAKER: Or if there is, I\'m guessing,

3 if there is an issue the student brings it to you.

4 It\'s a good quality control because maybe there is an

5 extra loan reporting and it\'s better to know \--

6 MR. LEVITT: That\'s right.

7 MR. BAKER: \-- third rather rather than \--

8

9 MR. LEVITT: And that has happened.

10 MS. HALL: \-- still in contact with the

11 school. Yeah, that\'s \--

12 MR. BAKER: So it didn\'t get canceled,

13 well, it really did get cancelled but it\'s still

14 showing as being a loan.

15 MR. LEVITT: Exactly.

16 MR. GETTE: Another issue that kind of

17 relates back, this was brought up not in the Perkins

18 Arena, actually, in the Cell arena. But you brought

19 it up in the Perkins arena was economic hardship

20 deferments and what is required in terms of proof

21 there. So that\'s something we heard not only from

22 the Perkins sect but from the Phelps side as well.

112

1 Some of the written comments we\'ve also

2 received, one is an interesting proposal that I

3 haven\'t talked to anyone about yet. I just saw it

4 come off our e-mail the other day. But defaulters

5 should not be reported to credit agencies because

6 this impedes them from getting good jobs that will

7 allow them to pay off their debt.

8 MS. ABADINSKY: I disagree.

9 MR. GETTE: You disagree. Yeah, I, you

10 know, can\'t say where that came from but one might be

11 able to guess.

12 MS. HALL: Not a problem. I\'m sorry. We

13 use that a lot. We try to tell students this is

14 going to impact your credit. You know, don\'t mess

15 around with it. It\'s going to impact your credit.

16 You\'re not going to be able to get a car. Does that

17 mean anything to you? They can\'t relate to the

18 mortgage stuff and all that. They\'re just going to

19 get out of the house and get an apartment. But the

20 car, you know, this way \--

21 MR. GETTE: Right.

22 MS. HALL: Oh, no.

113

1 MS. ABADINSKY: And you want lenders to

2 have a true picture of the debt that the individual

3 has so they don\'t start extending credit they

4 shouldn\'t have.

5 MR. BAKER: There\'s a positive credit

6 rating that gets established, too. A lot of young

7 people don\'t have any credit except their student

8 loans. So when they make payments, when it\'s time to

9 buy a car or a house, they\'ve got a history; a credit

10 history.

11 MR. GETTE: One of the other things that

12 came up, which is not so much regulatory right now,

13 but the issues of where we\'re going in terms of just

14 in time cash management with the advent of the

15 modernization effort and the ability really, in

16 direct loans, to be just in time. And how that

17 should apply in the FFEL Program. And what kinds of

18 concerns or thoughts should be taken into account as

19 we move in that direction.

20 MS. HALL: Yeah, I think, for us FFEL is

21 sort of moving in that direction because we don\'t

22 request the money from FFEL until we know the

114

1 student\'s registered. Because why should I get it on

2 my campus and not be able to disburse it because I

3 got some enrollment problems. And it comes in, it\'s

4 in their bank account like within three days.

5 MR. BAKER: Is this this release and hold

6 concept that they\'re using?

7 MS. HALL: \-- yeah, hold and release.

8 MR. BAKER: Hold and release.

9 MS. HALL: Yeah. I mean, it\'s kind of,

10 you know, of course I don\'t know what the, all the

11 guarantor regs, when your clock starts ticking maybe

12 even when it\'s holding. And maybe that\'s the issue

13 is the guarantor is still getting something off of it

14 and you don\'t want them to. I don\'t know, but it

15 seems to be, you know, when we get a little more, we

16 had a problem with some automation on it, but, you

17 know, we were surprised at how many were being held.

18 How many, on August 5th we still had 5,000 kids who

19 hadn\'t finalized their registration. Of course, the

20 bills weren\'t due until like a week later and we

21 panicked them all and told them their checks are

22 being held. Ah, you know, it\'s like they finally got

115

1 on the dime to get their registration. So, really,

2 we were, it helped us because we were getting more

3 kids registered earlier because I knew that we

4 wouldn\'t pull the cash over.

5 But, I don\'t know. To me it\'s sort of

6 working.

7 MR. BAKER: Can I follow up with a

8 question, Joyce, and others too. In this hold and

9 release, should I say, so you should have filed the

10 loan back whenever you\'re certified.

11 MS. HALL: Sure.

12 MR. BAKER: And you have to put some

13 estimated personal tax because the law requires it.

14 But, unlike in the traditional situation where the

15 money would just show up on those dates, they don\'t

16 do anything until you tell them now I want it.

17 MS. HALL: Right, right.

18 MR. BAKER: And you tell them now I want

19 it after you\'ve checked the eligibility.

20 MS. HALL: The registration.

21 MR. BAKER: And mostly it\'s registration.

22 You\'ve checked everything else beforehand. And then

116

1 the money shows up EFT and you move it EFT.

2 MS. HALL: Uh-huh.

3 MR. BAKER: \-- that quickly, but within

4 the account. When you send them that record saying

5 everything\'s, actually, send me the money, whatever

6 the record looks like, would there be a problem if

7 you included in that record the disbursement date or

8 delivery, technically, it\'s the delivery date? The

9 date that would be there, that Purdue, when Purdue

10 posted it in the student\'s account? When Purdue will

11 post it in the student\'s account?

12 MS. HALL: Oh, well, I suppose it would

13 just be another field. I mean, you know.

14 MR. BAKER: I mean, I don\'t care if you

15 answer it. It\'s just a system thing.

16 MS. HALL: Well, I know, you know, anybody

17 would tell us to add anything extra if somebody\'s

18 going to belly-ache. That\'s going \--

19 MR. BAKER: Right.

20 MS. HALL: That\'s going to ripple across

21 the pile. You don\'t realize what\'s going to happen

22 to us. You know, but because there\'s this file and

117

1 that file and that file. But, realistically, why

2 would you want that? I mean, because we\'ve got to

3 get it to them in three days. You give it to me,

4 legally. So let\'s, don\'t run hog wild with this one

5 because the rule is I\'ve got to get it to them within

6 three days. So you know that I\'m going to do it

7 within three days. So why give them an exact date

8 that it\'s going to be Monday. No, no. It\'s going to

9 be Tuesday. What would be, I would ask that

10 question. What would be the point?

11 MR. BAKER: Yeah. Just quickly. It was

12 two. I mean, if we\'re weighing all this. One is

13 because if we are going to have some kind of central

14 data base where the student can go to web and look at

15 with respect to this issue, assuming we\'re

16 centralized, they would see, the system would say

17 that it was disbursed at Purdue or Baker out on the

18 27th of September.

19 The other is to try and make sure to move

20 to a compliance rather than an enforcement mode in

21 terms of that three days. So if the date were there,

22 computers can figure out if it\'s more than three

118

1 days. And pick up and send a nasty message back

2 rather than a violation of that because of that

3 enforcement thing later.

4 MS. HALL: Yeah, yeah.

5 MR. BAKER: We\'re exploring all these

6 things.

7 MS. HALL: Well, I think if you gave

8 something to the schools for that piece of data, then

9 if it\'s just used to hammer more, but if it gets us

10 out of, like you say, something and then I think the

11 schools would look more favorably at that. But

12 again, they can go on-line and check with our largest

13 guarantor to see where the loan is. Then they can go

14 into our system and check where it is. Now, right

15 now, the first piece is not as clear but our records

16 show that it\'s here and it\'s whatever. Our financial

17 aid window on the web page, I think, shows where the

18 loan is.

19 MS. JOERSCHKE: I think you\'re looking at

20 it from just \--

21 MS. HALL: The large.

22 MS. JOERSCHKE: \-- a different type of

119

1 school may not have those types of capabilities.

2 MR. BAKER: Right.

3 MR. LEVITT: Jeff, where we run into a

4 little bit of a problem with the three day rule is

5 the, we verify a hundred percent attendance. So, we

6 got to be real careful on how, when we post aid

7 because of sometimes it\'s like pulling teeth to get

8 the instructors to get their attendance to you, so,

9 you know, with that kind of rule there it kind of

10 really affects, I mean, do we go ahead, I mean, of

11 course, we have to but do we go ahead and do we

12 affectively give the money out and then have to go

13 back and recover it because we find out that the

14 student hasn\'t attended or \--

15 MR. BAKER: Right.

16 MR. LEVITT: And I mean it becomes a

17 really big issue for a school that does take a

18 hundred percent attendance.

19 MR. BAKER: Because you all know what the

20 disbursement delivery date is until something happens

21 that\'s out of your control, like a faculty member

22 doing their job.

120

1 MR. LEVITT: Exactly.

2 MR. BAKER: Gotcha.

3 MR. LEVITT: And, Jim, another thing about

4 the FFEL Program, I think if you\'re going to move it

5 into an area where it\'s similar to direct lending you

6 got to resolve the problem of netting. And we have,

7 we have lenders now that we are, I think one of the

8 best things that happened to us as a school was being

9 in the Direct Loan Program because we see the process

10 of the, how we feel the process worked was great. I

11 mean, the whole mind set on how the program was set

12 up was fabulous. And so we, like I said, before we

13 try to mirror that process, you know, I think we\'ve

14 done a pretty good job because we have three lenders

15 that actually allow us to net now. In other words,

16 we, we\'re not, reconciliations a lot easier.

17 And, for instance, if we have money that

18 we have there, we can actually, you know, kind of

19 switch it around to the students that are eligible

20 and that kind of a thing. So, yeah, netting\'s a big

21 issue when it comes to the FFEL Program.

22 MR. GETTE: And that, I want to come back

121

1 to the hold and release. How does that work?

2 Because I think this, you raise the issue of just in

3 time cash management, I mean, really the purpose for

4 moving toward that would be to save \--

5 MS. HALL: Money.

6 MR. GETTE: \-- interest expenses that

7 allow, you know, cash is sitting there being unused.

8 So how does that \--

9 MS. HALL: Well, see, I don\'t know. When

10 the guarantor has the money ready and they say,

11 technically send it to the school, I think that\'s

12 when their clock starts ticking, doesn\'t it? When

13 they considered it disbursed? I mean \--

14 MR. BAKER: There\'s \--

15 MS. HALL: \-- the language is deferred \--

16 MR. BAKER: \-- a little bit.

17 MS. HALL: Yeah. And so I don\'t know if

18 you\'d have to change regulations to say you\'re

19 holding it for the school and as long as you hold it

20 for the school you\'re not gaining on it. And then

21 the minute you send it, I\'m not real sure on that

22 myself.

122

1 MR. GETTE: Okay.

2 MS. HALL: But please don\'t say I said

3 that. I mean, I don\'t have, I\'m not speaking for

4 guarantors and lenders and what they make. I have no

5 idea.

6 MS. JOERSCHKE: No, and we appreciate that

7 they do their job.

8 MS. HALL: And that they need some of that

9 money to operate.

10 MS. VETA: More generally, in what I

11 perhaps should have said at the beginning is that we

12 really do treat this as a listening session and not

13 that anyone who offers an idea is necessarily wedded

14 to it. And by the same token to the extent you\'re

15 hearing comments from any of us from the Department,

16 that doesn\'t necessarily \--

17 MS. HALL: You\'re going to go off and \--

18 MS. VETA: \-- represent a policy decision

19 or the position of the Department, but rather just

20 trying to share with you some ideas.

21 MS. HALL: And we appreciate it.

22 MS. JOERSCHKE: Overall in the country,

123

1 have you been hearing good comments about just in

2 time? Is it well received?

3 MR. BAKER: I\'m not sure. There\'s only,

4 we have ten to 15 schools on a pilot in RFMS and then

5 there\'s the dozen or so in \-- students, so I\'m not

6 sure a lot of people have given, I mean, we\'re out

7 there talking about it but you\'ve got today\'s \--

8 MS. HALL: Well, yeah. I know. Our state

9 is trying, they were trying to do just in time. And

10 last year we had to go to them and say, you know,

11 just in time for what? I mean, you know, because we,

12 we couldn\'t get the whole thing running until like a

13 month, they didn\'t want you to run your report to get

14 your cash until a month. And we said, gee, most of

15 our disbursements are done. So now they\'re giving us

16 80 percent of the money still, the second year into

17 it. 80 percent of the money up front. And then a

18 month later after school starts, you start doing your

19 reporting and then drawing down your cash.

20 And that\'s a little bit of a concern that

21 if you can only draw down the cash, I mean, you\'ve

22 got to be able to send it and get it, boom \--

124

1 MR. BAKER: One of the other \--

2 MS. HALL: \-- second day of class or

3 before even. Actually, ten days \--

4 MR. BAKER: The advantages, or at least

5 presumed advantages, and we\'re testing on this, and

6 you mentioned \-- make sense that this reconciliation,

7 which we talked about a little bit. Some people say

8 reconciliation goes away. I\'m not sure if it goes

9 away but I think it can be minimized if the idea is

10 that you don\'t get the money until, in your case, I

11 would guess that a very high percentage you don\'t

12 have to un-do because \--

13 MR. GETTE: That\'s correct.

14 MR. BAKER: \-- so, you get closer to just

15 the time. That\'s it. One transaction and we have,

16 and that\'s the other reason why getting a

17 disbursement data is interesting because then we have

18 the disbursement not to be given again.

19 The other side of the issue, to answer

20 your question about schools, some schools will look

21 at it and say, well, wait a minute. It\'s kind of

22 neat to be able to say send me \$100,000 and within 30

125

1 days I\'ll let you know who I gave it to. But we\'re

2 working real carefully, real slow.

3 MS. HALL: Well, I think we can certainly

4 see the value to the government of knowing at any

5 point in time what\'s ready to go and what\'s been

6 disbursed. So we\'re going be expecting big reports

7 from you, just in time reporting from the Department

8 of Education.

9 MR. GETTE: You\'ll go right on-line and

10 get it.

11 MS. HALL: Right.

12 MR. GETTE: Electronically, without

13 receipts.

14 MS. HALL: You know, that would be very

15 nice to be able to look up our records, our school

16 records. Not the student records, but the aggregate

17 school records.

18 MR. BAKER: Isn\'t there a way to do that?

19 MS. HALL: I don\'t \--

20 MR. BAKER: In PELL I think you can do

21 that.

22 MS. JOERSCHKE: They said it was going to

126

1 be coming up in the proximity. By the end of this

2 semester, wasn\'t it?

3 MR. BAKER: That is still going to be one

4 program at a time.

5 MR. GETTE: Yeah. There was some

6 discussion about use of forms or work sheets. This

7 came up mostly in the return of Title IV area. And

8 that came up earlier this morning. As a matter of

9 fact, yesterday at ACE they wouldn\'t let me leave

10 until I promised to, to not let Jeff off the plane in

11 coming here until he promised to do the work sheet,

12 so. He\'s promised to do that now. Are those

13 something that you all will use or do you already

14 have automated processes that \--

15 MS. HALL: No, I think, didn\'t you say it

16 would also be available electronically?

17 MR. BAKER: Uh-huh.

18 MS. HALL: And I think we would appreciate

19 anything if it works and it keeps us in compliance

20 and it\'s simple. I mean, it\'s not convoluted. Then,

21 yeah, I think we would use it.

22 MR. BAKER: One of the things that schools

127

1 might do electronically is to take the electronic

2 form and, I don\'t know how the techies do this. I\'m

3 sure they can. There are certain items that are

4 going to be standard at least for that semester at

5 your school. Like how many days in the semester.

6 And you don\'t want to put that on each time. But

7 our, by definition, is going to be blank. I got to

8 see. Maybe we can come up a way to allow you to put

9 that in and it stays there. It\'s a default lag or

10 something. Beginning of the semester, pay period,

11 end of pay period. That stuff.

12 MS. HALL: We do a lot of that for other

13 programs where we\'ve gotten to where, because again,

14 it really, in financial aid, I\'m to the point where I

15 really don\'t want a human person calculating anything

16 by hand because there\'s just too much room for error.

17 So say, but right now, only 90 percent or 85 percent

18 of financial aid can go that way. But we\'ve tried to

19 move toward electronic sheets like for state programs

20 or whatever so that the persons are just floating a

21 couple of fields and it calculates the bottom line

22 award because it\'s ridiculous. Because we have, so

128

1 much of the automation takes care of your compliance

2 issue, to have problems because 15 percent of it was

3 touched by human hand and all the errors turn up in

4 that.

5 So, any time we can have these forms like

6 that, electronically that will do it, that would be

7 great.

8 MR. GETTE: That\'s the reason why I asked

9 the question earlier was that one, that question

10 itself came from my VP of Finance. And in his action

11 plans for next year, of course, is to re-write the

12 title or the refund policy for our catalogue. But

13 the other was to automate through a form if this

14 could be available for you guys to automate that

15 process because we\'ve been looking to automate the

16 refund process because, like you say, there is room

17 for error when somebody does hand calculate it. And

18 so, yeah, we\'re definitely going to try to import

19 that form and do something with it to make it very

20 simple.

21 MR. BAKER: Another thing a form does, it

22 takes regulatory language and even handbook guidance

129

1 and puts it in steps. And you can hand that form,

2 you can almost hand that form to our systems person

3 and she or he can program it. And then you decide

4 which of those fields can come in from other systems

5 on campus. It can do an return Title IV with never

6 keying anything in it.

7 MR. GETTE: That\'s right.

8 MS. ABADINSKY: Having been \--

9 MR. GETTE: Theoretically, we can do that.

10 MS. ABADINSKY: \-- wants that work sheet.

11 I can\'t imagine how anybody would do that program

12 with the words and try to figure out how you even

13 calculate \--

14 MS. HALL: Right, yeah.

15 MS. ABADINSKY: \-- and that was a big

16 issue, I know. I did a write-up on it for our AVP

17 and I could log. We asked for the work sheet. We

18 don\'t have it. Our campus has to start moving. And

19 we tend to move as three campuses, so the work sheet

20 is definitely needed very quickly.

21 MR. GETTE: I was hoping not to gang up on

22 Jeff on that specific work sheet as much as to say

130

1 since we\'ve heard that area, are there other areas

2 where that sort of assistance would be useful? I

3 think I stumped the panel.

4 MS. HALL: Well, you know, it probably

5 just gets back to this whole idea of bench marking

6 and associations trying to have the best of the best

7 present what they\'re doing because I think that you

8 would hear that there are schools probably have some

9 work sheets that they\'re using for PELL that another

10 school didn\'t realize that if they had it they could

11 stop this hand stuff they\'re doing.

12 And most of us are willing to share a lot

13 of that, that we have. That\'s one thing about the

14 financial aid community, I think it\'s different from

15 a lot of other associations as we do try to share

16 unless it\'s like admissions and preparatory

17 information on recruitment. You\'re not going to

18 share that, but, you know, the more we can do to

19 encourage our colleagues to speak out at conferences

20 to show all these little tricks to the automation

21 that they\'ve done, that don\'t involve the mainframe

22 system that \-- our screens. I think that\'ll help all

131

1 of us. And then eventually it might fall back to,

2 well, it makes more sense for the Department to

3 provide that rather than all of us creating different

4 little things on our own.

5 MS. JOERSCHKE: Something that, you know, I

6 may be speaking out of turn since I\'m really not

7 involved in this process, but the reporting to

8 consumers, the reporting and stuff that institutions

9 are required to do, be it at the academic end or, you

10 know, the NCAA equity reporting or the campus

11 reporting, campus crime statistics. It seems to me

12 that there could be some standardization and perhaps

13 a work sheet even there provided to campuses where

14 it\'s very explicit about the types of information

15 they should be collecting so that there is a

16 standardization across the country. And that they

17 could then, you know, be down loading statistics into

18 and make it less burdensome to the institution.

19 It just seems like you\'d maybe be getting

20 more consistent data by doing it that way. And even

21 more timely. And maybe some of the issues that, you

22 know, you brought up could then be resolved by doing

132

1 that.

2 MR. LEVITT: Let\'s face it. If you\'re

3 going to have to report those crime stats, you\'re

4 probably going to have to tap into maybe four or five

5 different law enforcement agencies within your area.

6 So I think you\'re going to have to have some type of

7 way of acquiring that information. So, you know, I

8 think that\'s a great idea if there was some type of

9 form that you could go by then you would have a lot

10 easier way of complying with the regulations.

11 MS. JOERSCHKE: Electronically. I think

12 that that\'s just, and submission of it

13 electronically. I think that the schools, you know,

14 we\'re submitting things electronically all the time.

15 The web, you know, for financial aid. It just seems

16 like that would be the next step for those types of

17 very laborious types of things schools are doing.

18 MS. VETA: Let me raise another issue that

19 we\'ve heard a lot about and are thinking hard about

20 related to the electronic point made. That is

21 electronic signatures or digital signatures \--

22 MS. JOERSCHKE: We need them.

133

1 MS. VETA: Tell us what you mean when you

2 say that you need them.

3 MS. JOERSCHKE: Well, you\'re out there

4 allowing students to apply on the web but then on the

5 back end, they\'re required to, you know, provide the

6 signature page.

7 MS. HALL: It\'s like that example of

8 missing information. So we go through and we\'re

9 going to verify. We\'re going to get the missing

10 information. And if they had a capability of

11 providing, right now, they can just print it and then

12 they sign saying I certify this is true and correct

13 to the best of ability, blah, blah, blah.

14 And, because then it comes in on paper. So if I had

15 it electronically I would just take the fields from

16 what they provided to me and upload it directly to

17 the system. And then printout discrepancies to

18 review so I wouldn\'t be looking at everything.

19 MS. JOERSCHKE: It just seems like there

20 must be some way that you could collect the data. In

21 our world, we don\'t even go to banks anymore. We do

22 all of our stuff, we pay our debts, on,

134

1 electronically.

2 MS. HALL: And they\'re using thumbprints,

3 you know, like at Purdue Credit Union, you can get

4 into your account by a thumbprint or your code, pass

5 code. One or the other.

6 MS. VETA: So one of the questions is what

7 do you do about the technology because there are so

8 many different technologies out there whether it\'s

9 the retinal scan or the thumbprint or the digital

10 signature by, you know, a bunch of different numbers

11 or letters that you plug in. The question, I guess I

12 wanted to ask is whether you have any concern about

13 students either doing things electronically and then

14 saying after the fact, no, I really didn\'t mean to

15 apply for that loan. Or no, that\'s not my loan. And

16 you don\'t have a signature.

17 MS. JOERSCHKE: No, I don\'t. Nor on the

18 application either because I think that, you know,

19 the application at FAFSA, you have the verification

20 of the application information on the back and people

21 sign things anyway. You find errors no matter what.

22 They\'ll sign it even when they know there\'s a chance

135

1 of, you know, fines and imprisonment. They don\'t,

2 they don\'t read that stuff. It means nothing to

3 them. But you have the verification, on the other

4 hand, to be, you know, and that\'s \--

5 MS. VETA: And when you say you have the

6 verification on the other end, what do you mean?

7 MS. JOERSCHKE: Well, you\'re verifying the

8 data whether or not \--

9 MS. VETA: Who is?

10 MS. JOERSCHKE: Well, the school is.

11 Whether or not the application is correct or not.

12 You\'re getting tax returns and if we implement the

13 match with the IRS, I mean, what more do you want?

14 MR. GETTE: And, in a way right now, too,

15 you are verifying the data based on your other

16 matches. Social Security, date of birth, I mean,

17 there\'s \--

18 MS. HALL: You know, it\'s either that or I

19 guess you\'d have to this big data base in the sky

20 that the Department initially assigns the code and

21 you keep the code. That\'s the person\'s code, their

22 identifier and that\'s what they use every time they

136

1 file for four years, or whatever, for financial aid.

2 And they have to be responsible for it just like I\'m

3 responsible for my American Express code. And so

4 then, those three elements that identify that it\'s

5 me, you know, then whatever provided electronically

6 has to come with that code so that then I\'m assured

7 that, yes, you did provide me that code when you said

8 you wanted that loan. So that\'s you.

9 MR. BAKER: I assume you have on-line

10 registration?

11 MS. HALL: They actually go in to talk

12 with their academic advisor and they go on-line with

13 the academic advisor. We\'re just now starting to

14 redesign our whole registrars system.

15 MR. BAKER: Is there an institutional PIN

16 identifier that \--

17 MS. HALL: Well, we do have a PIN number

18 for the school, yes.

19 MR. BAKER: To do a bunch of activities

20 on.

21 MS. HALL: Oh, yes. To get into the web.

22 They have to have their PIN number.

137

1 MS. ABADINSKY: And we have touched tone

2 registration and they can, they go on with SS and

3 date of birth and then they can set their own PIN

4 number. I guess, I forgot what the statistic is but

5 it\'s a very high, like 90, over 90 percent do not

6 change from date of birth, their password. On the

7 Urbanic Campus, though, they use their student I.D.

8 number or the, whatever you, ISIR number off the

9 student I.D. in order to get in. They have a

10 different password system than we do on the Chicago

11 campus. And it\'s not Social Security number there.

12 MS. HALL: And they can get in and look at

13 their academic record and \--

14 MS. ABADINSKY: It\'s a \--

15 MR. BAKER: Right.

16 MS. HALL: And, you know, I have to tell

17 you that the academic records is, as if it came from

18 God. I mean, it really is. You know, people are

19 trying to protect the grades. We do not release the

20 grade. And so they are able to go and look up their

21 own grades with a PIN number. Their financial aid,

22 which is also, we\'re trying to be confidential about

138

1 and so.

2 MR. BAKER: How much, is a thread here,

3 believe it or not, PIN\'s are assigned a number of

4 different ways. They can pick their own, you assign

5 them one, they got to go see 14 people. That\'s

6 related in our discussions as thoughts to the level

7 of activities. So, going to a web, you know, to just

8 look at when vacation schedule is or something silly

9 like that is a no brainer. Going in and look at a

10 very sensitive academic record, financial aid record.

11 But the next level up is where they can do

12 transactions. Can they drop a class electronically -

13 -

14 MS. HALL: Not yet.

15 MR. BAKER: \-- using their PIN.

16 MS. HALL: That\'ll be in our whole

17 business, process redesign when we build our own

18 student academic records and it\'s two to three years

19 we\'re going to redo the whole thing.

20 MS. ABADINSKY: There are institutions

21 that do that, though.

22 MS. HALL: Usually, I think when we talk

139

1 about this whole issue, you know, you would have to

2 build in business rules that they could only do, if

3 they met certain things, drop it. So, for instance,

4 you might say, I\'m going to allow this population to

5 drop a class. But if they have a 2.0 and they have

6 this then they must get in and see an academic folk.

7 MR. BAKER: A first time freshman or

8 something.

9 MS. HALL: Right. So, I think most people

10 would build those systems having business rules.

11 MS. VETA: And similarly, if one was

12 talking about loan disbursements or those kinds of

13 things.

14 MS. HALL: Yeah, you could build in some

15 edits that say, yeah, 90 percent of them can do them

16 but a kid that has a certain level of debt or this,

17 maybe I want them to come in. I\'m almost reaching

18 the point where I\'m thinking about identifying a

19 group of kids that I\'m starting to be concerned about

20 their level of debt. That I might, even on our big

21 campus, say, you got to come in and talk to somebody

22 before we, either by phone or in person, you know,

140

1 because of your debt flow and we want to talk to you

2 because I think it gets back to my concern that

3 they\'re just checking it off and they don\'t know what

4 they\'re doing. And they\'re not sure it\'s a loan.

5 So, even now, I\'m thinking about doing that.

6 So, yeah, you could do it with a PIN

7 number, too. You could say, I\'m concerned about

8 these particular people.

9 MR. BAKER: Well, this doesn\'t mean that

10 if I can\'t bring the two together, and this is one,

11 and I got back to Jean\'s comment, I don\'t read

12 anything more into this. It\'s just we\'re all

13 exploring. It\'s not like the Department\'s thinking,

14 even thinking of necessarily moving in this

15 direction. I was looking at, two questions that come

16 up all the time is what would be the impact, what

17 would be the feeling at schools and why do you think

18 students would react if a) if they could have filed

19 for financial aid, pull up the pass electronically

20 using the institutional PIN, using the PIN that,

21 however they got it at your school to do certain

22 things, rather than a separate PIN process.

141

1 MS. JOERSCHKE: What do you with the

2 freshman or the people that are applying at seven or

3 eight different institutions at one time?

4 MR. BAKER: Before they have a PIN at your

5 place? Yeah, it would, good question.

6 MS. HALL: A temporary one.

7 MR. BAKER: Off the top of my head, it

8 would be a \-- process, obviously.

9 MS. HALL: I think that that, I know our

10 school would have trouble with that because they

11 wouldn\'t want that PIN number floating anywhere on

12 any other data base, I don\'t think.

13 MR. BAKER: What about the other way

14 around? Where we had a PIN, right now, our PIN

15 process is going to check some identifiers with the

16 Social Security Administration, so that\'s a level of

17 what dedication, there\'s all kinds of levels. That

18 would schools be willing to use, to have that PIN be

19 the PIN the students could use to do campus work?

20 MS. HALL: I think that students could opt

21 to, the students make up their own code.

22 MR. BAKER: If they make up their code

142

1 then wanted to use it.

2 MS. HALL: And they can opt to do that.

3 But I think if you told the school that they must use

4 it, from Indiana, let me tell you, it probably

5 wouldn\'t fly. You know, we\'re fairly conservative

6 state and it would be like, the government\'s telling

7 us to use? No, I don\'t think they would. But I

8 think many students might opt to use the government

9 number themselves because many people, right or

10 wrong, do that for several \--

11 MS. JOERSCHKE: Everyone has to have a

12 Social Security number and it seems like there\'s some

13 way to give them a number based on that. I don\'t

14 know.

15 MR. BAKER: It\'s not, it\'s not \--

16 MS. HALL: Well \--

17 MR. BAKER: The issue is if the first time

18 at the identification level, the first time.

19 MS. JOERSCHKE: Well, and then not

20 everyone, you know, I mentioned the IRS match. Well,

21 not everyone files a tax return.

22 MR. BAKER: Right.

143

1 MS. JOERSCHKE: So, you then have that

2 group of people that you\'re not going to be able to

3 match data with but it just seems like this, some way

4 to accommodate 90 percent of the people and then

5 there would still have to be the paper process for

6 the other people.

7 MR. BAKER: We are, by the way, just, you

8 answered my question you mentioned about the high

9 school seniors not in the flow yet, they\'re going to

10 be able to, parents too, to go to a web site and get

11 a PIN without having already been in our process.

12 So, I\'m not sure this is going to, so a high school

13 senior can go in and get a PIN and then they can file

14 that very first app electronically without a paper

15 signature.

16 MS. JOERSCHKE: Well, we have an

17 application, a web application, admission application

18 at Purdue and they just get a password when they go

19 in that first time to go back in. I mean, it\'s, you

20 know, that\'s your secured access to that. So it

21 sounds pretty similar to what you\'re doing now.

22 MS. HALL: We have a preliminary financial

144

1 aid form that they also do as part of the admissions

2 on-line.

3 MS. JOERSCHKE: Providing their financial

4 data.

5 MS. HALL: \-- 48 hours, estimated

6 financial aid and the initial; it\'s working really

7 good. And boy, did we start, we started getting hits

8 on that thing the minute it was up, that electronic

9 admissions. It\'s amazing.

10 MR. GETTE: It is really amazing.

11 MR. BAKER: That stuff\'s all magic. I

12 don\'t know \--

13 MS. HALL: Yeah.

14 MR. BAKER: Every time you think you

15 understand it they \--

16 MR. GETTE: In ten years, somebody under

17 the age of 20 will be doing all of our jobs because -

18 -

19 MS. JOERSCHKE: That\'s right.

20 MR. GETTE: \-- because they\'re the only

21 ones who will understand the system.

22 There\'s one last area that I\'d like to

145

1 just throw out because it came up in some of the

2 groups. It relates to the question that was asked in

3 the higher education amendments about oversight and

4 review versus, compliance versus eligibility and

5 those issues. But just really the oversight area, in

6 general, are there things that you find troubling or

7 that are difficult for you to deal with in the

8 oversight arena right now?

9 MS. HALL: Does fraud and abuse fit into

10 that category? I\'m trying to get help with that.

11 MR. GETTE: Sure.

12 MS. VETA: Tell us about that.

13 MS. HALL: My most recent, I have

14 difficulty, I finally just called Washington because

15 I know you can call that one, this whatever you use,

16 but I thought, well, I got to find; and the lady was

17 really kind of rude and I said, excuse me, but you\'re

18 really being rude to me. And she said, no, I\'m not.

19 Oh, yes you are. I\'m just trying to find out so I

20 can report a potential fraud case. And I was just

21 kind of stunned. And I think there are, a lot of

22 people don\'t understand. And we do try and there

146

1 have been some good presentations on fraud and abuse

2 but I think out in communities people are feeling

3 that nothing happens to these people so why should I

4 report them. And I have a different opinion and that

5 is I\'m reporting them. If nothing happens to them, I

6 still want them to know and I want to report it and

7 let you guys find out whether or not or decide not to

8 take action. And, so, I don\'t know if the people

9 understand that whole process for reporting fraud and

10 abuse.

11 And their responsibility to do that. And

12 I feel very comfortable telling whomever, I am

13 required to do this. I feel protected by the law in

14 that sense. But I\'m not sure everybody realizes that

15 that is there. And someone gave a really good

16 presentation at Nasa on this whole issue and I was

17 able to sit through most of that session. And that

18 was really a good session.

19 MR. GETTE: Where did you end up \--

20 MS. HALL: End up with that case? I

21 probably got to the name of the person \--

22 MR. GETTE: In the IG\'s office?

147

1 MS. HALL: Yeah, and I reported it. We

2 suspended the student and he shouldn\'t have done what

3 he did.

4 MS. VETA: We may want to talk to you a

5 little more about that after the formal on the record

6 here \--

7 MS. HALL: Yeah, I don\'t want to go there.

8 MR. GETTE: Right.

9 MS. JOERSCHKE: I think it\'s, just to

10 piggy back on what she\'s saying, we\'ve had just

11 numerous problems with not only our students but our

12 staff calling the information, the customer

13 information number. Our students are receiving

14 incorrect responses \--

15 MR. GETTE: This is a 1-800-4FEDAID?

16 MS. JOERSCHKE: Yes. And they\'re, and I\'m

17 speaking not only for us but for our regional

18 campuses because that\'s policy analyst for both of,

19 for all of us. They call me sometimes and ask me the

20 questions. And we\'re dealing a lot with these

21 veterans. And the 1-800 number they\'re saying,

22 there\'s no problem. You call the school and they can

148

1 make you an independent student or they\'ll say, well,

2 I was in the reserves. Or I was on active duty.

3 Well, it\'s active duty for training. And they\'re

4 just saying, well, you\'re a veteran. You just go in

5 there and you tell them that they have to be, they

6 have to accept you as an independent.

7 And they\'ll give us the name of the person

8 that they spoke to. And then we\'re put on the

9 defense and we, you know, we\'ve even been in contact,

10 I tell you, with every VA office in the entire nation

11 practically. I mean, we know every number. There

12 are two sheets of papers and who we talked to across

13 the country. We even have recruiting documents from

14 students and their recruiters and stuff. And to

15 verify why they are not veterans.

16 And it really looks poorly not just on the

17 Department but on us. And the students are furious.

18 They are absolutely furious. And our one campus has

19 a lot of, up here by Chicago, they have a lot of

20 military personnel with reservist and they\'re getting

21 hit really, really hard with it. And it\'s just, it\'s

22 a shame. I just would like to see that, you know,

149

1 the people at the 1-800 number are asking, asking

2 more questions. You know, going a little bit further

3 with; because the definitions are different between

4 the Department of Defense and the Department of

5 Education. And it shouldn\'t get to that

6 confrontational stage.

7 MS. HALL: What we\'ve started doing, and I

8 think we\'re better and it\'s not on these issues, by

9 the way. It\'s about some that can be resolved, is

10 get on a three way call. So we get the parent and we

11 say, let\'s talk it over and get that person from the

12 Department Ed because that way you don\'t have he

13 said, she said, we said. And that has been helping

14 somewhat but I\'m not sure we need to be doing that,

15 you know. We don\'t have a 1-800 number in our

16 office.

17 MS. JOERSCHKE: When we get to drug issues

18 coming up we\'re going to be here.

19 MR. BAKER: I\'d like to broaden the

20 discretion just a little bit, though, because we have

21 customer support numbers. There\'s a 1-800 for Vet

22 aid. There\'s a customer support number for aid

150

1 administrators. And then all of the systems have

2 them. So, the idea in my mind is that we want to

3 make, we set those up and those people are supposed

4 to be trained and not supposed to be rude, and all of

5 that. In those cases, the question is if we set, you

6 shouldn\'t have to have happened to come to a meeting

7 here and we\'re here to mention this. And we\'re going

8 to take notes and hopefully take care of this, but

9 how do we set up a secondary process so that somebody

10 in Washington or regional office can jump in somewhat

11 on a specific case, but more importantly we need to

12 train these people with this veterans business,

13 without that secondary process becoming the primary

14 process? That\'s my concern. I mean, how do we, how

15 would we make sure that our customers and partners,

16 human nature being what it is, you might just jump to

17 this second call or one problem that didn\'t just go

18 quite right the first time, it goes to the call.

19 Personally, we get that. I mean, I get

20 calls and I\'m glad to help people out but every once

21 in a while there\'s one and I want to say to the

22 person but I don\'t, you know, you really should have

151

1 resolved this another way.

2 MS. HALL: Right. I have the same

3 problem. We have a Air Counsel program and we try to

4 have them answer, there\'s about 70 percent of the

5 calls in that same issue. And it\'s working better

6 since I\'m now have a person sitting down there with

7 them who is a full time financial aid administrator

8 who\'s been in financial aid for a long time rather

9 than them just sitting down in a room and running to

10 find their supervisor. Having that person, so that

11 they can quickly put that person on hold and ask them

12 before they just automatically \-- because, you know,

13 depending on this student or this person might know

14 this so their inclination is anything over these four

15 questions is going to somebody else.

16 It\'s, it\'s really probably sitting down

17 and documenting, if you have time, what the calls are

18 that are coming in. And, I mean, I keep telling him,

19 there are only 1,000 questions. I mean, let\'s find

20 out what they are and then we can prioritized them.

21 And then you, once you, you know, I said, actually

22 you could just sit and write down the questions over

152

1 a period of time. But then, of course, financial aid

2 changes so during the March the questions are this.

3 Some look like you need some log of questions and

4 then you take the log and then you decide these

5 represent the 75 percent. And we make sure we train

6 those people on the 75 percent so that you don\'t get

7 all the first questions going through.

8 MS. JOERSCHKE: I think one thing \--

9 MS. HALL: The training \--

10 MS. JOERSCHKE: The matches are just the

11 data base failures and all \--

12 MS. HALL: Those are our secondary

13 probably.

14 MS. JOERSCHKE: \-- are just, they are an

15 area unto themselves that we \--

16 MS. VETA: And is that in your school or

17 in dealing with the Department?

18 MS. JOERSCHKE: In dealing with the

19 Department because we\'re the middle, we\'re in the

20 middle of everything. And the source says, talk to

21 your financial aid administrator. And so we\'re, and

22 we\'re also the ones collecting the data, you know,

153

1 collecting social security problem, we\'re the Veteran

2 Administration problem or whatever it is. So it

3 seems to me, and I really have to tell you, there was

4 a number that was established many years ago just for

5 financial aid administrators. And Denise used to, I

6 don\'t know if she\'s still

7 there \--

8 MR. BAKER: No, she\'s doing \--

9 MS. JOERSCHKE: \-- and it was wonderful.

10 I used that when I needed it, when I was at Oklahoma

11 State. I was always treated very, very well. The

12 people were very good. They\'d look up the

13 regulations. They\'d site the regulations. And

14 they\'d also give me their names so that you call back

15 if you needed to. Very, very supporting and even

16 would talk to the families if needed to.

17 I haven\'t had that experience for, well,

18 probably the last year or so. So that was really

19 good. And I don\'t, I don\'t know if they\'re not doing

20 that anymore. If they actually take the time to look

21 at the regulations or their just giving, you know, an

22 answer without really researching a problem. But I

154

1 think that\'s most of it, the front line people and

2 having been a counselor, you know, in the past and

3 been on the front line, you know what it\'s like when

4 you\'re getting a lot of questions and a lot of calls.

5 And you try to answer them to the best of your

6 ability and sometimes you\'re not as responsive as you

7 should be. But it seems to me that the people that

8 are answering those should have some way of going

9 through a set of questions instead of just saying,

10 oh, well, you \--

11 MS. HALL: Well, and, you know, yeah.

12 MS. JOERSCHKE: I mean, you need to

13 research or to ask a couple of questions to get to

14 it. And then if it\'s at another level perhaps the

15 person needs to be referred on. But it shouldn\'t be

16 just immediately, we\'ll go back and tell your

17 financial aid administrator this or that.

18 MS. HALL: Well, there are two suggestions

19 that I have and one of them deals with, I know the

20 businesses probably already do this. You have the

21 ability where you basically have a data base sitting

22 there that\'s accessible right there for those people.

155

1 They are able to type in the question and it must

2 sweep all the words and say, 75 percent of this

3 question and pull up the answer so that you get a

4 consistent.

5 And second is asking America Express or

6 some of these successful that have call senders how

7 the heck do they run those things because I\'m

8 telling, I will call American Express. Those people,

9 they always get me what I want when I want, whatever.

10 Just no questions asked. Just wonderful.

11 And thirdly, I know at Purdue, they\'re

12 trying to start, in the consumer family sciences a

13 call center type program and whatever. And we even,

14 eventually, hope to tie up with them to say come over

15 and we\'ll be a test site for you to help. And I know

16 it\'s one of the first in the country at an

17 institution of higher learning. And I know that they

18 would be looking for areas to look into. And I don\'t

19 know if there would ever be a onnect there, but, you

20 know, having an outside consultant come in and look

21 at, look at; because they don\'t need to know

22 everything then \-- try to say how you should set up

156

1 your call center. And maybe you\'ve already done that

2 but certainly looking at successful ones is a good

3 way to start.

4 MS. JOERSCHKE: When you start getting

5 into this drug conviction stuff, I can just see a lot

6 of confusion. And that\'s just one group of people I

7 wouldn\'t think that you would want to be antagonizing

8 and putting anyone in the position, especially the

9 Department in this adversarial role with these

10 people.

11 MR. GETTE: I mean, the sense I\'m getting,

12 and I just want to clarify it based on one thing you

13 said is that the, the place where this seems to be

14 occurring most is with the 1-800-4FEDAID number.

15 MS. JOERSCHKE: Yes.

16 MR. GETTE: That on the other side, on the

17 institutional call center that you were

18 receiving \--

19 MS. JOERSCHKE: That was in the past. I\'m

20 not saying that\'s occurring now. We\'re getting very

21 \--

22 MR. GETTE: So, you\'ve seen a

157

1 deterioration \--

2 MS. JOERSCHKE: \-- responses, varied

3 responses.

4 MR. GETTE: Okay.

5 MS. JOERSCHKE: This one particular

6 student that Joyce was mentioning that we were

7 researching is veteran status, I cannot tell you how

8 many times we called and \--

9 MS. VETA: Let me, but let me ask you a

10 slightly different question. Putting aside this one

11 student who sounds like has been difficult to address

12 for a lot of different reasons. Do your comments

13 still hold both with respect to, first with 1-800-

14 4FEDAID?

15 MS. JOERSCHKE: Yes.

16 MS. VETA: And what about the

17 institutional 1-800 number?

18 MS. JOERSCHKE: You mean, whether we

19 should have on or shouldn\'t \--

20 MS. VETA: No. Whether you\'re finding the

21 Department being responsive, putting aside the \--

22 MS. JOERSCHKE: It depends on the issues;

158

1 the matches, the failures. Those seem to be the

2 problems. Those are the areas where for some reason

3 it\'s the most difficult area to get guidance on.

4 MS. HALL: Yeah, I\'d say \--

5 MS. JOERSCHKE: And those are the worse

6 things to deal with as far as students because

7 they\'re eligibility issues. If we don\'t resolve

8 them, they don\'t get aid. And they do not understand

9 that the vague area out there, that gray area, they

10 don\'t understand why something\'s in place and we

11 can\'t help them get passed it or the Department\'s not

12 helping them. I mean, it\'s like they\'re in limbo.

13 And sometimes, yeah, they don\'t get aid. I mean,

14 they\'re flat out out of, you know, the process. But

15 it\'s just, it\'s the data base failures. And we, i

16 have to tell you, in our comments to the NEGREGS, we

17 put in there that we felt the Department needed to

18 have a central office with a 1-800 number that dealt

19 specifically with these issues. And you\'ll see that

20 there again because it is an issue. It really is.

21 And I\'m not just saying it from here. I\'m saying it

22 also from my experience.

159

1 MS. HALL: And I just want to add,

2 emotionally, okay, I\'ve run this through my mind

3 before. I\'m trying to put myself in the student\'s

4 shoe. When you tell somebody they\'re not eligible

5 for financial aid it\'s paramount to say and you can\'t

6 go to school this year. And we don\'t want to go

7 there. The families view that as a, it\'s, you know,

8 it\'s like you\'re saying my life is over. I will

9 never get this. I will never go to school to get a

10 degree. To tell somebody that they got to lay out a

11 semester, I don\'t know how you find that, it\'s not

12 even something that comes out of my mouth. I don\'t

13 even tell them that even though I know it\'s true. I

14 let them come to the conclusion because the last

15 thing I can say on my campus is, oh, you shouldn\'t be

16 here. You know? It gets into the whole enrollment

17 thing. But families look at that. You just are

18 amazed at how dramatic that is for, or emotional that

19 is for them in terms of when push comes to shove and

20 you get to that point where you say no, can\'t do it.

21 How am I going to go school? Well, of course, now we

22 have the opportunity to run so they take out \$30,000

160

1 to come, but.

2 But, you know, I mean, really, I can\'t

3 impress enough that this is, it\'s as near and dear to

4 people as their home. You know, people, your home is

5 your home and stay at, you know, stay out of it. But

6 it\'s getting that education. I mean, you\'d think,

7 you\'d say, well, gee \-- go out and earn some money.

8 No, no, no. Not an option. They think, and the

9 other side, I mean, knows that when you leave the

10 chances of you coming back are more slim. So I see

11 how they see that, but then the family gets very

12 emotional and, you know, we probably made more calls

13 to the police department in the last, this last month

14 or two of students; and just two days ago one because

15 he was, we don\'t know what he\'s going to do because

16 he\'s going to take matters into his own hands.

17 That\'s what he said.

18 MS. VETA: We appreciate, you know, where

19 you\'re coming from. That is a very important issue.

20 MS. HALL: That is becoming more of a

21 problem when this, and we are the persons that they

22 see. Then we are the ones they are angry with. They

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1 are not angry with you guys. They\'re angry with us.

2 MS. JOERSCHKE: It\'s just that we all need

3 to communicate better with him. And maybe it should

4 also be like spelled out a little bit better in the

5 instructions or in the student guide. And it\'s

6 really rather vague in some of the areas. But

7 really, you know, I know that there\'s a publication

8 cost and stuff like that but those are big issues.

9 MS. HALL: Making it more clear. These

10 things happen to you this will delay your financial

11 aid and this is a requirement of the federal

12 government. And we can say that but we, they don\'t

13 hear that. By the time they get to us they\'re just

14 angry, ticked off, whatever. And it\'s a little scary

15 when you have that. I mean, I, you know, I\'ve had

16 cases where I had to move my parking because I didn\'t

17 want to go out at night to the parking garage, so you

18 know, I had to go for a couple months at closer

19 parking.

20 MR. GETTE: Right.

21 If for no other reason, you know, I think

22 coming out to hear those stories, you know, that\'s,

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1 you know, as much as we don\'t like to hear them, you

2 know, it\'s good for us to be out here and actually

3 getting that sort of thing.

4 What, in the oversight area with the,

5 actually audited program review area, is there

6 anything in those areas? I mean, I know we made a

7 lot of, we\'ve tried to make a lot of advances with

8 the institution of the case process and so forth in

9 that area. Are there any issues in that general

10 realm that you\'re aware of?

11 MS. HALL: Of course, we\'re audited every

12 year. And it goes to our State Board of Accounts.

13 And we\'re actually working on our own, because in the

14 compliance area, we\'re trying to work on a pro-

15 active approach using QA model, from the QA school

16 model \--

17 MS. JOERSCHKE: Site visit.

18 MS. HALL: \-- site visit ourself with our

19 regional. So we\'re trying to do some of it

20 internally because we, because we want to catch

21 things while they\'re happening, not the year after.

22 And so that\'s why we\'re moving to, try to do some of

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1 that because if you do it on the, say we\'re going to

2 do it this fall on the current population. And then

3 if we find something that we need to tweek, we can

4 tweek it. The only problem with the audit is it\'s

5 done and there you go and it\'s not fun.

6 MR. GETTE: Right.

7 MS. JOERSCHKE: And our internal auditors

8 is part of our team.

9 MS. HALL: Our team. We\'ve included \--

10 MS. JOERSCHKE: So we have the audit part.

11 MS. HALL: Financial aid has gotten so

12 complex that with this team of comptroller area

13 represented \-- or financial aid, we meet monthly.

14 That\'s on and sometimes in person if the topic

15 warrants it, like re-authorization or something like

16 that. And then we just have our internal audit

17 sitting there. It\'s gotten to that point. I mean,

18 most people would say, I don\'t want my internal audit

19 sitting, hey. I do because if we get into, well, I

20 want to do it this way and the interpretation of the

21 law and she\'s going to be the one we deal with later

22 anyway, you mind as well have her there and be up

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1 front about all of it.

2 MR. GETTE: That\'s a refreshing approach

3 to something that I think we\'re as a Department

4 trying to move towards as well, which is compliant

5 versus, you know, identifying, yeah, and taking

6 punitive measures after the fact. You know, we much

7 rather have all the participants and a hundred

8 percent compliance then \--

9 MS. HALL: Yeah, I think if you did offer

10 schools, I know NASFA has their thing. It\'s pretty

11 expensive, I think, for them to come in and do an

12 audit. But I think if schools had a tool, and not

13 all schools are QA schools. So, see, this to me gets

14 back to the value of that whole QA thing that we\'re

15 in is that particular, it\'s called the Institutional

16 what now?

17 MS. JOERSCHKE: Site thing.

18 MS. HALL: Site thing. And it was

19 available to the schools to utilize themselves. Now,

20 the last thing you need is to say, well we\'ll send

21 the fed there to do your pre-audit. No. That\'s not

22 what I\'m suggesting. I\'m just suggesting that if

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1 schools needed it, there was this document available

2 that they could do their own internal, you know, take

3 your sample group and run them from point a to point

4 disbursement. I think more people would do that if

5 they, you know, but they\'re drowning. And then they

6 just sort of have to rely on, okay, now I\'m going to

7 have an audit. And it\'ll come up then and then I\'ll

8 spend hours defending and sending data somewhere

9 because it came up in an audit. And I\'d rather be

10 pro-active and that\'s what we\'re going to do.

11 So we wanted to tweek, we\'re kind of

12 combining audit function with this QA thing and we\'re

13 letting our internal audit look at to make sure that

14 it\'s a quality sample and all of that. But it\'s

15 more, you know, this would something we could use

16 that would really help you make sure you\'re in

17 compliance because the, we do the NASFA self guide,

18 too, every year. So we\'re trying that. So with that

19 piece and this other piece we\'ll know better probably

20 in the spring, once we\'ve done it this fall as to how

21 well that turned out. But it\'s going to grind

22 through a lot of different things. I mean, the

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1 whole, the whole thing. And we\'re hoping, then if we

2 did find something, we say, whoops. But let\'s go

3 back and identify the kids that this might happen to

4 and let\'s fix it. And that will be much more

5 effective than later, when I can\'t do anything about

6 it.

7 MR. GETTE: That\'s great. That\'s really

8 the agenda that we\'ve been hearing about.

9 MS. VETA: Well, we very much appreciate

10 you taking the time. This has been very informative

11 from our perspective. And you\'ve raised a lot of

12 good issues, some of which we have heard from other

13 folks. Others of which we\'re hearing now, today, and

14 both kinds of issues are very important to us. And

15 we look forward to continuing the dialogue with you.

16 So this listening session is now

17 adjourned. Thank you.

18 (Whereupon the session adjourned at 12:10 p.m.)

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