# Presentation: 749203

## CAMPUS-BASED PROGRAMS UPDATE

**CAMPUS-BASED PROGRAMS UPDATE**

- Gail McLarnon

## Campus-Based Programs Update

- Budget and Reauthorization Proposals for the Federal Perkins, Federal Work Study (FWS) and the Federal Supplemental Educational Opportunity Grant (FSEOG) Programs
- Hurricane Guidance
- Dear Colleague Letters
- Individual Program Issues

## Budget & Reauthorization Proposals

- FY 06 Bush Administration Proposals
- Funding Requests
- Federal Perkins Loan Program
- No New FCC/No New Cancellation Reimbursement
- FWS
- $990.0 million
- FSEOG
- $778.7 million

## Budget & Reauthorization Proposals

- FY06  House Campus-Based Appropriations:
- Perkins:     0 FCC/$66 million to Reimburse Cancellation
- FWS    :	$990 million
- FSEOG:    $778.7 million

## Budget & Reauthorization Proposals

- FY06 Senate Campus-Based Appropriations:
- Perkins:      0 FCC/$66 million to Reimburse Cancellation
- FWS	   :      $990 million
- FSEOG:	  $804.7 million

## Budget & Reauthorization Proposals

- Administration’s Reauth Proposals
- Federal Perkins Loan Program:
- Eliminate the Perkins Loan Program
- Recall the Federal Portion of Institutional Revolving Funds
- Require the Assignment of all Outstanding Perkins Loans to the Department of Education

## Budget & Reauthorization Proposals

- Administration’s Reauth Proposals
- Federal Work Study:
- Phase Out Base Guarantee in Allocation Formula
- Better Targets the Allocation of FWS Appropriations to Institutions for Timely Degree Completion of Pell Recipients
- Create a New Set-aside of 20% of FWS Funds for Community Service Activities

## Budget & Reauthorization Proposals

- Administration’s Reauth Proposals
- Federal Work Study:
- Require the Secretary to Provide Schools and Public and Private Nonprofit Agencies With:
- Information on Best Practices in Community Service and Technical Assistance
- Secretary May Consult with Corporation for National and Community Service

## Budget & Reauthorization Proposals

- Administration’s Reauth Proposals
- FSEOG
- Phase Out Base Guarantee in Allocation Formula
- Better Targets the Allocation of FSEOG Appropriations to Institutions with Timely Degree Completion for Pell Recipients

## Budget & Reauthorization Proposals

- S. 1614 – Reported out of Senate Health, Education, Labor & Pensions Committee Unanimously on September 8, 2005
- Perkins Loan Program
- Perkins Loan Program is reauthorized
- Eliminates “written” forbearance request
- Military deferment for active duty/National Guard during war/national emergency

## Budget & Reauthorization Proposals

- S. 1614 – Perkins Loan Program Proposals:
- New Cancellation Provisions
- Expands Head Start Cancellation to Include Full-time Staff in Pre-K or Child Care Programs
- Faculty Members of Tribal Colleges
- Librarians in Low-Income Schools/Areas
- Speech Therapists in Low-Income Schools
- Removes “defense of infancy” as borrower defense against repayment

## Budget & Reauthorization Proposals

- S. 1614 – Federal Work Study Proposals:
- Allows the Secretary to Waive the 7% Community Service Requirement if Institution Certifies that 15% or more of its Full-time Enrollment Participate in Community Service
- Allows Work Colleges to Support Existing and New Model Student Volunteer Community Service Projects
- Raises allowance for books/supplies in Allocation Formula to $600

## Budget & Reauthorization Proposals

- S. 1614 – FSEOG
- Strikes requirement to allocate portion of appropriations to Institutions with timely degree completion for Pell recipients
- Raises allowance for books/supplies in allocation formula to $600

## Budget & Reauthorization Proposals

- H.R. 609 – Reported out of House Education and the Workforce committee, by a vote of 27 to 20, on July 22, 2005
- Phases out the base guarantee from the Campus-Based allocation formula
- Raises allowance for books & supplies in allocation formula to $600

## Budget & Reauthorization Proposals

- H.R. 609 – Federal Perkins Loan Program
- Reauthorizes the Perkins Loan Program
- Raises Undergrad/Grad loan limits
- $5,500/$27,500 -- Undergraduate
- $8,000/$60,000 -- Graduate
- Eliminates “written” forbearance request
- Requires Secretary to authorize compromise repayment on defaulted loans

## Budget & Reauthorization Proposals

- H.R. 609 – Federal Perkins Loan Program
- Decreases consecutive monthly payments required to rehabilitate from 12 to 9
- Allows for 100% cancellation for Military service in areas of hostility
- Military deferment for Active Duty/National Guard in war or national emergency

## Budget & Reauthorization Proposals

- H.R. 609 – Federal Work Study
- Eliminates requirement that on-campus childcare provided as a community service be “Open and accessible to the community”
- Better targets the allocation of FWS appropriations to institutions for timely degree completion of Pell recipients

## Budget & Reauthorization Proposals

- H.R. 609 – Federal Work Study
- Job location and development programs
- Not more than 15% or $75,000 of FWS allocation to establish or expand jobs for enrolled students
- At least one-third of such amounts to locate/develop community service jobs

## Budget & Reauthorization Proposals

- H. R. 609 – Federal  Work Study
- Work Colleges
- Expanded to include and require “Work-learning-service” programs

## Budget & Reauthorization Proposals

- H.R. 609 – FSEOG
- Requires Institutions to give priority to Pell grant recipients and to award no more than 10 % of FSEOG allocation to non-Pell recipients
- Better targets the allocation of FSEOG appropriations to Institutions with timely degree completion of Pell recipients

## Hurricane Guidance

- Link to all Hurricane guidance:
- _[http://ifap.ed.gov](http://ifap.ed.gov/)_
- Federal register notice extending reporting deadlines (Sept. 9, 2005)
- Electronic announcements
- Hurricane information for students, parents, borrowers & Institutions of higher Ed
- Use Gen-04-04 guidance if Katrina/Rita guidance inapplicable

## Hurricane Guidance for Campus-Based Programs

- Underutilization penalty waived for affected institutions
- Perkins Loan Program
- Borrowers in repayment receive automatic 3-month forbearance - No request/no documentation/no 3-year limitation
- In-School borrowers remain in “In-School”

## Hurricane Guidance for Campus-Based Programs

- FWS
- Requirement to submit requests for waiver of community service waived
- Submit written request including info in Q&A #4 of DCL CB-05-05
- Reminder: employing FWS students in cleanup/relief efforts considered part of “community service” activities

## Congressional Action on 	Hurricane Relief

- Pell Grant Hurricane and Disaster Relief Act (P.L. 109-66)
- Student Grant Hurricane Disaster Relief Act (P.L. 109-67)
- Waives repayment of Pell and other Title IV grants, respectively, for students who withdraw because of Hurricanes

## Congressional Action on 	Hurricane Relief

- Natural Disaster Student Aid Fairness Act (P.L. 109-86)
- Allows ED to reallocate campus-based funds to:
-  schools located in a gulf hurricane disaster area
-  schools that accepted students forced to withdraw from hurricane damaged institutions

## 2005 Dear Colleague Letters of Interest

- GEN 05-17 published 11/  /05 Announces Waiver of student title IV grant repayments due in accordance with Return of Title IV Aid requirements

## 2005 Dear Colleague Letters of Interest

- DCL GEN-05-13 – Updates GEN-05-07: Requesting approval to make a late disbursement beyond the 120-day period
- Requests must be made directly by School or Third Party Servicer
- Fax request on school letterhead:
- 202-275-5522 *(new fax number)*
- Attn: FSA LLD Processing Team, “Late” Late Disbursement Approval Request

## 2005 Dear Colleague Letters of Interest

- All requests must include
- Date of request, School name and OPE ID
- Contact information
- Student name and SSN
- Type of aid and amount to be disbursed
- Explanation why disbursement not made while student was enrolled

## 2005 Dear Colleague Letters of Interest

- Pell, FSEOG & Perkins requests:
- Award year
- Payment period beginning/end dates
- Did student complete the payment period
- If not, when did student cease to be enrolled
- Date award was made to student (FSEOG and Perkins only)

## 2005 Dear Colleague Lettersof Interest

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

## 2005 Dear Colleague Lettersof Interest

- Dear Colleague Letter CB-05-11 Introduces new Perkins loan default reduction assistance program (DRAP) (published July 7, 2005)
- New DRAP process initiated and managed via eCampus-Based website
- Effective late July 2005

## 2005 Dear Colleague Letter of Interest

- DRAP Dear Colleague Letter (cont.)
- Eliminates need for a School to manually request, create and send DRAP file to the Department via SAIG
- School or its Servicer enters/edits/updates borrowers information
- School or its Servicer can monitor and track letters

## 2005  Dear Colleague Letters of Interest

- Dear Colleague Letter  CB-05-03 – Use of State scholarships and grants as the non-federal share of FSEOG Awards (published February 25, 2005)
- All State scholarships and grants, except LEAP/SLEAP awards, meet non-federal share requirement

## Perkins Loan Program 	Management Issues

- Excess cash/fund deficit strategies
- Request increase in LOE or Return Cash
- Make short-term loan to fund
-  “In-School” and “in Grace” versus “in repayment” for consolidating borrowers and calculation of cohort default rates
- Use of late fees: Withdraw or keep in fund to obtain overdue payments

## Perkins Loan Program 	Management Issues (continued)

- Perkins Master Promissory Note
- Schools may direct borrowers to secure websites when providing notices and disclosures under 668.165 and 674.16 (See DCL GEN – 05-16)
- Only outstanding loans included in “total cumulative balance owed” disclosure

## Perkins Loan Program 	Management Issues

- New notes after cancelled disbursement in first 12 months is a School’s choice
- Use of new MPN after borrower’s bankruptcy is a School’s choice

## Perkins Loan Program 	Management Issues

- HEROES Act extended through September 20, 2007 (P.L.109-78)
- Federal Register Notice published December 12, 2003 Also Extended
- Contains Waivers and Modifications to HEA and program regulations
- _[http://ifap.ed.gov/fregisters/fr12122003.html](http://ifap.ed.gov/fregisters/fr12122003.html)_

## Perkins Loan Program 	Management Issues

- Excludes all Military Service from Title IV borrower’s initial grace period
- Requires loan holders keep affected individuals in an “In-School” or “In-School” deferment
- Waives collection on defaulted loans while borrower is an affected individual
- Waives documentation/3-year limit on Military deferment

## Perkins Loan Program 	Management Issues

- Military service does not interrupt service required for loan cancellation
- Military service does not interrupt required consecutive payments to rehabilitate or make satisfactory repayment arrangements to regain eligibility

## Perkins Loan Program 	Management Issues

- Waives written, written agreement and supporting documentation for initial forbearance for Perkins borrowers
- Requires documentation beyond initial forbearance period
- Periods of forbearance for Perkins borrowers do not count against 3-year limit

## FWS Program 	Management Issues

- Student’s supervisor may electronically certify student’s work and earnings
- Electronic certification and payrolls must adopt safeguards against fraud and abuse

## FWS Program 	Management Issues

- Safeguards against fraud/abuse include:
- Password protection & changes at intervals
- Access revocation for unsuccessful log-ins
- User identification & entry-point tracking
- Random audit Surveys with Supervisors
- Security Tests of the code access

## FWS Program 	Management Issues

- Corporation for National and Community Service & Department of Education to develop “Summer of Service Federal Work Study”
- Wholly invests students in community service
- Summer service allows students to help pay for school without compromising academics
- Students can work in settings unavailable to them at their own college or university

## FSEOG Program 	Management Issues

- FSEOG Priority Award Concept
- First selection group
- Students with the lowest expected family contribution (EFC) who will also receive Pell grants in that award year
- Second selection group
- Students with the lowest EFCs who are not receiving Pell grants

## FSEOG Program 	Management Issues

- FSEOG Priority Award Concept
- Keep documentation of student’s EFC and confirm Pell eligibility before disbursing FSEOG
- If student receives NO Pell and FSEOG award was made in good faith, recovery of FSEOG funds not required

## Contact Information

- I appreciate your comments and feedback.  I can be reached at:
- Gail McLarnon
- Phone:  202-219-7048
- FAX:  202-502-7874
- Email:  _[gail.mclarnon@ed.gov](mailto:gail.mclarnon@ed.gov)_