# Presentation: 946236

## Federal Update

**Dan Madzelan**
**Postsecondary Education**
**Kay Jacks**
**Jeff Baker**
**Federal Student Aid**

## Agenda

**National Budget & Legislation**
**Policy & Operational Information**
**Data Analysis & Usage**

## Program Budget
FY ’05
(2005-2006)

**FY ’05**
**(2005-2006)**

## FY ’05 Appropriations Status

**H.J. Res. 107 ****	****- ****	****Signed by the President ****	****  ****	****  ****	****September 30**
**H.R. 4818****	****-  ****	****Consolidated Appropriations****	****	****Final Conference Report ****	**** ****	****	****November 20**
**H.J. Res. 114****	****-   Signed by the President ****	****	****	****November 21**

## Title IV Program BudgetsAppropriations

***    President's FY 05 Budget Submission **
********	****	****2005 Final Conference Report**

## Title IV Program BudgetsAid Available

***President's FY 05 Budget Submission**

## FY 2005 Budget Request

**Address Campus-Based Formula Issues**
**Address Needs of Distance Learners**
**FWS Community Service Reserve**
**Modify “Drug Eligibility” Rule**

**FY 2005 Budget Request**
**Programmatic Changes**

## FY 2005 Budget Request

**Increase Teacher Loan Forgiveness**
**Disbursement Relief for Low CDR Schools**
**Increase Loan Limits**
**Broaden Repayment Options**
**Retain Variable Interest Rates**
**Require Insurance Fee**
**Reserve $3 Billion for Other Changes**

**FY 2005 Budget Request**
**Programmatic Changes**

## 
Reauthorization

**Reauthorization**

## Reauthorization

**P.L. 108-366 - ****	****Extends the HEA through  ****	****September 30, 2005**
***Signed by the President on  October 25***
**P.L. 108-409 - ****	****Modifies the Tax-exempt ****	****Special Allowance Rule and ****	****Expands Teacher Loan ****	****Forgiveness**
***Signed by the President on October 30***

## Reauthorization

**House Passed**

**H.R. 438   – ****	****Teacher Recruitment and **
**	****Retention Act – July 9, 2003**
**H.R. 2211 – ****	****Ready to Teach Act – July 9, 2003**
**H.R. 3076 – ****	****Graduate Opportunities in Higher**
**	****Education Act – October 23, 2003**
**H.R. 3077 – ****	****International Studies in Higher ****	****Education Act – October 21, 2003**

## Reauthorization

**In Committee**

**H.R. 3039 – Expanding Opportunities   in Higher Education Act **
**H.R. 3311 – Affordability in Higher Education Act**
**H.R. 4283 – College Access and Opportunity Act**

## On the Horizon

**Tax-exempt Special Allowance**
**Teacher Loan Forgiveness**
**State Tax Tables for 2005-06**
**Pell Grant Payment Schedules**
**Campus-Based Awards**
**IPEDS Redesign of Student Data:  Feasibility Study**

## 
Default Rates 

**Default Rates **

## National Student Loan Default Rates

-  **1990    1991    1992    1993   1994   1995    1996    1997   1998    1999   2000    2001    2002   2003    2004**

- 5.2

**Percentage**

## Default Rate by Sector (FY 2000-2002)         

| School Type | FY 2000 | FY 2001 | FY 2002 |
| --- | --- | --- | --- |
| Public – 2 Year | 9.2% | 8.6% | 8.5% |
| Public – 4 Year | 4.8% | 4.4% | 4.0% |
| Private – 2 Year | 6.9% | 6.8% | 6.1% |
| Private – 4 Year | 3.8% | 3.3% | 3.1% |
| Proprietary | 9.4% | 9.0% | 8.7% |
| Foreign | 2.6% | 2.3% | 2.0% |
| National Rate | 5.9% | 5.4% | 5.2% |

## CPS Policy Issues

## Primary EFC – EFC applicant is statutorily entitled to.
Regular EFC – Uses all data
Simplified Needs Test EFC – Uses all data    except assets
Auto Zero EFC – EFC equals zero regardless       
	of other data
Secondary EFC 
	Calculated when data on the application support an EFC calculation under the Simplified Needs Test (SNT) but there is sufficient asset data to calculate a ‘Regular” EFC

**Regular EFC – Uses all data**
**Simplified Needs Test EFC – Uses all data    except assets**
**Auto Zero EFC – EFC equals zero regardless       **
**	****of other data**
**Secondary EFC **
**	****Calculated when data on the application support an EFC calculation under the Simplified Needs Test (SNT) but there is sufficient asset data to calculate a ‘Regular” EFC**

- Secondary EFC

## Secondary EFC

**Secondary EFC will still be reported on ISIR, but –**
**May not be used to pay Title IV aid**
**If flagged on COD record, will be ignored**
**If student not eligible for SNT **
**	****(or Auto Zero)**** –**
**Corrections to records must be submitted to CPS**
**Payment made on resultant transaction where regular EFC will be reported as primary EFC**

## SSN Match

**HEA requires match with SSA**
**Important that identifiers be accurate**
**Same as SSA**
**Identifiers flow through aid processes**
**FAFSA to CPS to ISIR to school**
**School to COD (Pell and DL) or FFEL**
**School, COD, or FFEL to P-Note**
**Lender (DL or FFEL) to Loan Records**

## SSN Match

| CPS Processing | 2004-05 | 2005-06 |
| --- | --- | --- |
| SSN not in SSA database  | Hard Reject  | Hard Reject |
| SSN for deceased person | Hard Reject  | Hard Reject  |
| DOB does not match SSA | Verifiable Reject* | Verifiable Reject*  |
| Name does not match SSA | “C” Flag ISIR  | Verifiable Reject*  |

*** If verified, new transaction results in a “C” Flag ISIR **

## When no positive match with VA –
 Current (2004-05)
CPS changes Question 54 to ‘No’
Student now dependent
Usually reject – no parent signature
Student provides proof (DD214) to FAA who does a dependency override

** ****Current (2004-05)**
**CPS changes Question 54 to ‘No’**
**Student now dependent**
**Usually reject – no parent signature**
**Student provides proof (DD214) to FAA who does a dependency override**

- Veteran’s Match

## When no positive match with VA –
 New (2005-06)
No change to Question 54
Student remains independent
Comment and ‘C’ Code
Student provides proof (DD214) to FAA
If no proof, FAA changes Question 54
Parental signatures and data needed

** ****New (2005-06)**
**No change to Question 54**
**Student remains independent**
**Comment and ‘C’ Code**
**Student provides proof (DD214) to FAA**
**If no proof, FAA changes Question 54**
**Parental signatures and data needed**

- Veteran’s Match

## Recent Letters 

## Recent LettersCampus Based

**  ****CB-04-12 (Nov) FISAP Edits**
**  ****CB-04-11 (Sep)****	****Default Reduction Program**
**  ****CB-04-10 (Sep)****	****Supplemental Awards**
**  ****CB-04-09 (Jun)****	****2005-06 FISAP**
**  ****CB-05-08 (Jun)****	****2003-04 CB Reallocation**
**  ****CB-04-07 (May)****	****Perkins Loan Cancellations**
**  ****CB-04-06 (Apr) ****	****2002-03 Close Out **
**  ****CB-04-05 (Mar)****	****2004-05 FWS C/S Waivers**

## Recent LettersGeneral

** ****GEN-04-13 (Nov) Ordering FAFSAs**
** ****GEN-04-12 (Nov) GEN-04-03 Modified**
** ****GEN-04-11 (Oct) Reporting of Foreign Gifts**
** ****GEN-04-10 (Sep) Use of ED-PIN**
** ****GEN-04-09 (Sep) Recent Hurricanes**
** ****GEN-04-08 (Sep) Required Electronics**
** ****GEN-04-07 (Jul)  Ombudsman Contact Info **
** ****GEN-04-06 (Jul)  XML Schedule**
** ****GEN-04-04 (Feb) Disaster Letter**
** ****GEN-04-03 (Feb) Return of Title IV Aid**

## Foreign Gift Reporting 
(GEN-04-11)

**(GEN-04-11)**

## Foreign Gift Reporting

**Why? **
**Required by section 117 of the HEA**
**Condition of Title IV participation**
**Who? **
**All domestic institutions that offer a bachelor's degree or higher, or that offer a transfer program of not less than two years that is acceptable for credit toward a bachelor's degree, are required to report. **
**Triggers? **
**Must report if total of all gifts/contracts with a foreign source exceeds $250,000 in any calendar year or it is owned or controlled by a foreign source.**

## Foreign Gift Reporting

**When?**
**No later than the January 31 or July 31, whichever is sooner, that immediately follows the activity that triggers the need for a report.**
**How?**
**Use FSA's electronic application process (eAPP) (www.eligcert.ed.gov). Submit the report electronically and mail in the signature page to the address provided.**
**More Information?**
**Case Management Team for your State. The telephone numbers for the Case Teams can be found at **_[www.](http://www.eligcert.ed.gov/)__[eligcert](http://www.eligcert.ed.gov/)__[.ed.](http://www.eligcert.ed.gov/)__[gov](http://www.eligcert.ed.gov/)_**.**

## 
Use of PIN
(GEN-04-10)

**Use of PIN**
**(GEN-04-10)**

## Requesting and Using an ED-PIN

**ED-PIN Used –**
** ****As part of electronic signature**
** ****To access Privacy Act information **
**Requirements**
** ****Requestor must be PIN-Owner**
** ****Must be sent to PIN-Owner (email, USPS) **
** ****Only used by PIN-Owner**

## If ED-PIN Compromised –
Not Issue ED-PIN
De-Activate ED-PIN
Invalidate Documents
FAFSA’s
Prom Notes

**Not Issue ED-PIN**
**De-Activate ED-PIN**
**Invalidate Documents**
**FAFSA’s**
**Prom Notes**

**Requesting and Using ****an ED-PIN**

## System Requirements
(GEN-04-08) 

**(GEN-04-08) **

## System Requirements Dear Partner Letter

**Minimum and Optimal Requirements **
**	****for Desktop PC **
**ISIRs**
**COD**
**DL**
**For 2005-2006 Processing**
**All schools use COD Common Record – XML**
**All schools must submit audits and financial statements using eZ-Audit**

## System Requirements 

**System Requirements**

_**Minimum**_**	****     ****	****	****	**_**Optimal**_
**IBM Compatible****	****	****	****	****	****Intel/AMD Compatible**
**1.2 GHz Speed****	****	****	****	****	****Pentium 4 – 2.80 GHz**
**512 MB RAM****	****	****	****	****	****	****1 GB SDRAM**
**60 GB Hard Drive****	****	****	****	****80 GB Hard Drive**
**56 Kbps Modem****	****	****	****	****DSL Line or High Speed**
**3.5/1.44 MB Disk Drive****	****	****3.5/1.44 MB Disk Drive**
**SVGA Monitor****	****	****	****	****	****SVGA Monitor**
**Windows Keypad****	****	****	****	****Windows Keypad**
**Laser Printer (8.5 x 11)****	****	****Laser Printer (8.5 x 11)**
**48x CD-ROM Drive ****	****	****	****48x CD-ROM Drive **

## System Requirements Operating Systems

**FSA Supports –**
**Windows 2000**
**Windows XP Professional**
**FSA Supports Until July 1, 2006 –**
**Windows 98**
**Windows 98SE**
**Windows ME**
**FSA Does Not Support –**
**Windows 95**
**Windows XP Home**

## 
Compliance Initiative

**Compliance Initiative**

## Compliance Initiative 

**Conduct ****fact-finding ****field work**
**Take oversight action**

- Compliance Initiative

**INCREASE IN PROGRAM INTEGRITY**

## Federal Perkins Loans in default for ten or more years
Dependency overrides or professional judgment exercised at rates substantially above the national average
Closed School Loan Discharges paid to students where main location remains open
Same AGI reported on FAFSAs from year to year

**Dependency overrides or professional judgment exercised at rates substantially above the national average**
**Closed School Loan Discharges paid to students where main location remains open**
**Same AGI reported on FAFSAs from year to year**

- Types of Data Anomalies

## Ages of applicants  
First year Stafford Loans >$2,625
Stafford Loans not prorated for short programs
No NSLDS Transfer Monitoring profile 
Verification

**First year Stafford Loans >$2,625**
**Stafford Loans not prorated for short programs**
**No NSLDS Transfer Monitoring profile **
**Verification**

- Data Anomalies (continued)

## 
Experimental Sites

**Experimental Sites**

## Experimental Sites 	Section 487A(b) HEA 

**	****A limited number of institutions participate voluntarily as experimental sites to provide recommendations to the Secretary on the impact and effectiveness of proposed regulations or new management initiatives.**

- Experimental Sites 	**Section 487A(b) HEA **

## Experimental Sites 

** ****Current Experiments**
**Ability to Benefit Flexibility**
**Overaward Tolerance**** **
**Entrance Loan Counseling**** **
**Exit Loan Counseling**** **
**Multiple Disbursement for Single Term Loans**** **
**Thirty-Day Delay**** **
**Loan Fees in Cost of Attendance**** **
**Loan Proration for Graduating Borrowers**** **
**Credit Title IV Aid to Institutional Charges**** **
**Credit Title IV Aid to Prior Term Charges**** **

- Experimental Sites

## 
IRS Match

**IRS Match**

## “ Collaboration”

**Two Words to Remember --**

***“ ******Collaboration”***

***“******Uncertainty”***

## What is the Legal Status of FAFSA – IRS Match?

**1998 Reauthorization Allowed Match**
**Internal Revenue Code Section 6103 must be amended**
**HR 3613 – the “Student Aid Streamlined Disclosure Act of 2003”**
**Introduced November 21, 2003**
**House Ways and Means Subcommittee on Oversight**
**Invitation to Comment**
**No Action**

## 
Tax Filer Reminders

**Tax Filer Reminders**

## Tax Filer Reminders

**To encourage applicants to update CPS with actual tax return data.**
**Date:**
**Shortly after April 15, 2004 - One-time only**
**Method:**
**Email if applicant provided email address Paper if no email address provided **

## Tax Filer Reminders

**Student and/or parent where --**
**Estimated tax filer on latest transaction**
**Not selected for verification**
**No professional judgment**
**Not graduate/professional student**
**EFC $6,000 or less**

## Tax Filer Reminders

**Compare FAFSA information with tax return**
**Make corrections**
** ****Web or paper**
**Do not update if school has asked for 1040 forms**

## 
Thank You

**Thank You**