# Presentation: 573909

## Session # 11

- General Provisions Regulations Package
- Michelle Belton
- Brian Kerrigan

## History

- Negotiated Rulemaking
- Federal Register Notice - Aug. 18, 2006
- Regional hearings
- Berkeley, CA             - Sep. 19, 2006
- Chicago, IL                - Oct. 5, 2006
- Orlando, FL                - Nov. 2, 2006
- Washington, DC          - Nov. 9, 2006

## History (continued)

- Four negotiating committees were established:
- General Provisions
- Loans
- Academic Competitiveness & National SMART Grants
- Accreditation
- Negotiations from December - June

## General Provisions Package

- Consensus reached
- August 8, 2007 NPRM:
- reflected the proposed regulatory language agreed to by committee
- 22 public comments received by end of comment period (September 7, 2007)
- Final rules:  November 1, 2007
- Effective date:
- July 1, 2008
- Early implementation

## General Provisions Package

- Definitions
- Professional degree
- Graduate or professional student
- Undergraduate student
- Full-time student
- Three quarter-time student
- Half-time student

## General Definitions

- _Professional Degree_
- Above bachelor’s degree
- Generally requires professional licensure
- List of examples, including J.D., D.V.M., D.D.S., Pharm. D.

## General Definitions

- _Graduate or professional student_
- Two key points:
- Grad/Prof students cannot receive undergraduate level aid and graduate level aid at same time
- Institution can change a student’s status from “undergraduate” to “graduate or professional” once a student has completed at least 3 years at undergraduate level.

## General Definitions

- _Undergraduate student_
- Key Points:
- For Perkins, FFEL, and DL programs, any student who takes courses at or below the baccalaureate level is an undergraduate
- For Pell, ACG, SMART, and FSEOG a student is only an undergraduate if she is pursuing her first bachelor’s degree or below

## General Definitions

- _Undergraduate student (cont’d)_
- For Pell, a student who has a bachelor’s and is studying to earn a state-required teaching certification could be an undergraduate
- First three years of a dual degree program students are undergraduates
- First four years of a program lasting longer than five years that leads to a bachelor’s degree.

## General Definitions

- _Full-time student_
- Moved calculation from Pell Grant regulations
- Also clarified definition of full-time student for correspondence programs

## General Definitions

- _Half-time student & Three-quarter time student_
- Existing definitions in the Pell Grant program regulations were moved to the General Provisions regulations

## General Provisions Package

- Other “definitions”
- Independent study for direct  assessment programs
- Substantially equal in length
- Successfully completes
- Treatment of aid when recipient does not begin classes

## Direct Assessment Programs

- _Independent Study_
- Only applies to Direct Assessment Programs
- Course of study with predefined objectives determined by student & professor
- Requires regular and substantive interaction

## Treatment of Aid when recipient does not begin classes

- _Key Points_
- Consolidated Return to Title IV requirements in General Provisions.
- Must return Title IV funds used to pay a student’s expenses within 30 days of discovering a student has failed to attend class.
- Institutions restricted from disbursing funds to any student who they know will not be starting classes (i.e., a student who has been expelled)

## Treatment of Aid when recipient does not begin classes

- _Key Points (continued)_
- Institutions not required to return funds that are disbursed directly to a student in a study abroad program or who is attending a foreign institution
- Institutions must notify lenders to issue a final demand notice to these students

## General Provisions Package

- Payment period
- Credit hour with standard terms or terms that are substantially equal
- Credit hour with terms that are not substantially equal
- Credit hours w/o terms or clock hours
- Cohort default rate exemption
- Excused absences
- Re-entry w/i 180 days
- Re-entry after 180 days or transfer

## Payment Period

- For credit hour programs with standard terms or terms that are substantially equal, _it’s the term_
- For credit hour with terms that are not substantially equal—
- Grants and Perkins, _it’s the term_
- FFEL and DL, _it’s 1⁄2 the credit hours and 1⁄2 the weeks_
- For credit hours w/o terms or clock hours, _it’s 1⁄2 the (credit or clock) hours and 1⁄2 the weeks_

## Payment Period

- When the cohort default rate exemption applies, _it’s the loan period_
- Excused absences count if—
- Written policy
- # does not exceed the lesser of
- accrediting agency policy,
- State agency policy, or
- 10%

## Payment Period

- Re-entry w/i 180 days, _stay in the same payment period_
- Re-entry after 180 days or transfer –
- _calculate new payment periods, or_
- _remain in the same payment period,_
- Continuous enrollment,
- Substantially similar coursework,
- Substantially equal payment periods,
- Little or no changes in charges, &
- Credits are accepted in new program

## General Provisions Package

- Minimum period for loan
- Credit hour with standard terms or terms substantially equal, with no term less than 9 weeks
- Clock hours or credit hours w/o standard terms and w/o terms that are substantially equal with no term less than 9 weeks
- Transfer students
- Completing one program and immediately starting another

## Minimum Period for a Loan

- For credit hour program with standard terms or terms substantially equal, with no term less than 9 weeks, _it’s the term_
- For clock hours or credit hours w/o standard terms and w/o terms that are substantially equal with no less than 9 weeks, _it’s the lesser of_—
- _The length of the program_ (or the remaining portion of the program), or
- _The academic year_

## Minimum Period for a Loan

- For transfer student, _it’s the remaining portion of the program or academic year_ (The student can get the remaining balance of the annual loan)
- For completing one program and immediately starting another, _it’s the remainder of the academic year_ (The student can get the remaining balance of the annual loan limit at the loan level of the new program)

## General Provisions Package

- Academic year progression
- Credit hour programs with standard terms or terms substantially equal, with no term less than 9 weeks
- Credit hour program with non-standard terms that are not substantially equal or each term is not at least 9 weeks or credit hours w/o terms
- Clock hour programs

## Academic Year Progression

- For credit hour programs with standard terms or terms substantially equal, with no term less than 9 weeks, _the student progresses when the academic year calendar period elapses_

## Academic Year Progression

- For credit hour programs with non-standard terms that are not substantially equal or each term is not at least 9 weeks or credit hours w/o terms, _the student progresses at the later of_—
- _Completion of the weeks_, or
- _Completion of the coursework_

## Academic Year Progression

- For clock hour programs, _the student progresses at the later of_
- _Completion of the weeks_, or
- _Completion of the clock hours_

## R2T4 Changes

- Confirmation not needed for PWD of grant funds
- PWD of grant funds asap but no later than 45 days after the institution determines the student withdrew
- PWD of loan funds asap but no later than 180 days after the institution determines the student withdrew
- Use of the payment period that ends later (see next slide)

## R2T4

- For credit hour programs with non-standard terms that are not substantially equal in length—if the payment period is used for calculation and the student gets:  1) grants and/or a Perkins (where the payment period is the term), and 2) an FFEL or DL (where the payment period is 1⁄2 the hours and 1⁄2 the weeks),
- _Use the payment period that ends later, and_
- _Attribute funds to the payment period that ends later_

## R2T4 Changes

- Academic Year is 24 credit hours & 30 weeks
- Terms: 1 = 10 wks, 2 = 6 wks, 3 = 14 wks.
- 		FFEL (DL) PP1	      FFEL (DL) PP2
-               15 weeks                               15 weeks
- WD at day 50
-       10 weeks               6 weeks                      14 weeks
-  Grant PP1	       Grant PP2 	        Grant PP3
-  (Perkins)           (Perkins)             (Perkins)

## R2T4 Changes

- The WD was at day 50 (which is in both the FFEL/DL PP1 and the Grant/Perkins PP1)
- Assume student got an FFEL and a Pell
- FFEL/DL PP1             = 15 weeks*
- Grant/Perkins PP1     = 10 weeks
- Determine the payment period that ends later* and use it

## R2T4 Changes

- PP 1 = 10/30 X $4,310 =  $1,437
- PP 2 =   6/30 X $4,310 =  $   862*
- _PP 3 = 14/30 X $4,310 =  $2,011_
- Attribute the portion of Pell from the Pell PP 2 to be included as Aid That Could Have Been Disbursed (as if Pell was disbursed for the FFEL PP 1)
-   (Attribution for 5 wks of Pell from PP 2 is: 5/6 X $862* = $718)

## R2T4 Changes

- Total Title IV Aid disbursed or could have been disbursed for R2T4 calculation:
- 	FFEL PP 1 			    = $1,750
- 	Pell PP 1   			    = $1,437
-   Portion from Pell PP 2    _= $   718_
- 	Total                               $3,905

## Calculation of a Pell Grant

- Use of Formula 1
- Credit hour programs
- 12 hours for full-time per term
- At least 30 weeks
- In 2 semesters or trimesters (fall through spring) or 3 quarters (fall, winter, spring) with no overlapping terms
- Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly), where students are not in overlapping terms

## Calculation of a Pell Grant

- Credit hour w/o terms and clock hour programs (Formula 4)
- Scheduled Pell x the lesser of—
- _Hours in the payment period_
- 	Hours in the academic year
-  			    OR
- 	_Weeks in the payment period_
- 	Weeks in the academic year

## Calculation of a Pell Grant

- Correspondence programs w/o terms (Formula 5)
- Half-time amt x the lesser of—
- _Hours in the payment period_
- 	Hours in the academic year
-  			    OR
- 	_Weeks in the payment period_
- 	Weeks in the academic year

## Calculation of an ACG/SMART

- Use of Formula 1
- Credit hour programs
- 12 hours for full-time per term
- At least 30 weeks
- In 2 semesters or trimesters (fall through spring) or 3 quarters (fall, winter, spring) with no overlapping terms
- Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly), where students are not in overlapping terms

## Calculation of an ACG/SMART

- Credit hour w/o terms and clock hour programs (Formula 4)
- Scheduled award x the lesser of—
- _Hours in the payment period_
- 	Hours in the academic year
-  			    OR
- 	_Weeks in the payment period_
- 	Weeks in the academic year

## General Provisions Package

- Cash Management
- Issuing a check
- Electronic disbursements
- Minor prior-year charges
- Late disbursements
- Returning unclaimed funds
- Loan cancellation notice and confirmation of a loan
- Excess cash

## Cash Management

- _Issuing a check_
- Issued on date mailed or date student notified
- Student has 21 days to pick up check
- After 21 days, school must mail check, initiate EFT or return the funds

**Notes:**
Intended to ensure that a school produces a check that a student may pick up at a specified location.  

Cases where schools held credit balances longer than 14 days waiting for students to make a disbursement selection.  

School is solely responsible for making timely credit balance payments – may not depend or rely on student.

## Cash Management

- _Electronic Disbursements_
- School may have a policy requiring students to have bank account
- If student does not have or want an account, school must disburse funds in another way
- If school opens an account or actively assists student, certain conditions apply

**Notes:**
Promotes use of electronic funds transfers.
Policy or enforcement of policy may not delay the disbursement of title IV funds.

If school opens or establishes process for opening bank accounts, for the most part codified the guidance in GEN-05-16

## Cash Management

- ● _Electronic Disbursements_
- Must obtain student’s written consent to open the account
- Inform student of terms and conditions
- May not make any claims against the funds in the account
- No cost to student for opening account or receiving debit or stored-value card

**Notes:**
Bank account is a checking, savings account or account that underlies a stored-value card.  Account must be insured by the FDIC or National Credit Union Share Insurance Fund.

Claims against the account can only be made after getting the student’s permission or to correct an error.

No cost for the initial card issued.  

## Cash Management

- ● _Electronic Disbursements_
- Ensure that student has convenient access to branch office or ATM, no fees for cash withdrawals
- School may not limit use of the card to certain vendors
- May not market or portray card as a credit card

**Notes:**
Convenient access means branch office or ATM on campus, on school-owned facilities, or immediately adjacent to campus.

## Cash Management

- _Minor prior-year charges_
- Amount increases to not more than $200
- Do not need to get student’s permission for tuition and fees or room and board
- Cannot use current year funds to cover prior-year charges of more than $200

## Cash Management

- _Late disbursements_
- Late disbursement period extended from 120 to 180 days
- No late disbursements after 180 days

## Cash Management

- _Returning unclaimed funds_
- Uncashed check must be returned no later than 240 days after check issued
- If check or EFT is returned, can make additional attempts to re-disburse
- Attempts must be made no later than 45 days after EFT or check is returned
- Title IV funds _never_ escheat to the state

## Cash Management

- _Loan notice and confirmation_
- If school obtains affirmative confirmation, current loan notice procedures apply
- Without confirmation:
- Must notify student not earlier than 30 but no later than 7 days after crediting account
- Must give student 30 days to cancel loan or loan disbursement

## Cash Management

- _Loan notice and confirmation _
- Affirmative confirmation is a process where a school obtains written confirmation of the types and amounts of title IV loans the student wants for an award year
- Must be obtained before loan funds are disbursed
- Includes signed award letters, web-based process for accepting awards

## Cash Management

- _Excess Cash_
- Includes any title IV funds received from ED that are deposited or transferred into a federal account as a result of an award cancellation, adjustment, or recovery
- Only the 1% tolerance option is retained
- Finding may trigger cash monitoring or reimbursement

## Contact Information

- We appreciate your feedback and comments. We can be reached at:
- _[Michelle.Belton@ed.gov](mailto:Michelle.Belton@ed.gov)__ (202) 502-7821_
- _[Brian.Kerrigan@ed.gov](mailto:brian.kerrigan@ed.gov)__  (202) 219-7058_
- Fax Number                  (202) 502-7874