Michigan Association of Student Financial Services
Administrators
Federal UpdateMay 23, 2006
Gail McLarnon United States Department of Education
MASFSA Federal Update
FY 2006 Final Appropriations Higher Education Reconciliation Act
of 2005 President’s FY 2007 Budget Request HEA Reauthorization Dear Colleague Letters & Federal
Register Notices
FY 2006 Final Appropriations Public Law 109-148 -- Department of
Defense Appropriations Act, 2006 Emergency Appropriations for Hurricane
Education Recovery 1% Government-wide Reduction of FY
2006 Discretionary Appropriations Public Law 109-149 -- Departments of
Labor, HHS, and Education, and Related Agencies Appropriations Act, 2006
Final FY 2006 Program Budgets(dollars in thousands)
Award Year President's Final2005-06 Request Appropriation
Pell Grant $ 12,364,997 $ 17,952,821 $ 17,345,230 (Max Award) $4,050 $4,150 $4,050
(Shortfall) $ 4,300,821 $ 4,300,821 $ 4,300,000
FSEOG $ 778,720 $ 778,720 $ 770,933
FWS $ 990,257 $ 990,257 $ 980,354
Perkins $ - $ - $ - (Cancellations) $ 66,132 $ - $ 65,471
LEAP $ 65,643 $ - $ 64,987 Math/Science $ 50,000
Program
* Includes shortfall
* *
HERA – Higher Education Reconciliation Act of 2005 Deficit Reduction Act of 2005 – P. L 109-171
Conference Report Passed House on December 19, 2005 – 212-206
Conference Report Passed Senate on December22, 2005 in slightly different form – 51 to 50
House Passed Senate’s Version on February 1
President signed into law February 8, 2006
Budget Reconciliation—Key Higher Education Provisions Authorizes “Academic
Competitiveness Grants” $750 to first-year undergrads at 2-
and 4-year schools who complete rigorous high school curriculum
$1,300 to second-year undergrads at 2- and 4-year schools who complete rigorous high school curriculum and earn at least a 3.0 GPA as 1st year undergrad
Budget Reconciliation – Key Higher Education Provisions Authorizes National “Science and
Mathematics Access to Retain Talent (SMART)” Grant Program $4,000 to 3rd and 4th year undergrads at 4-year
schools with at least a 3.0 GPA who major in physical, life, or computer sciences, mathematics, technology or engineering or a foreign language critical to national security
Both programs are funded and will be operational for the 2006-2007 award year
Budget Reconciliation – Key Higher Education Provisions Effective July 1, 2007: 1st and 2nd
year Stafford loan limits increase to $3,500 and $4,500, respectively
Effective July 1, 2007, $12,000 loan limit for grad/professional students
Authorizes PLUS Loans for graduate and professional students
Budget Reconciliation – Key Higher Education Provisions Provides for a 3-year military deferment
for all title IV borrowers applicable to loans made on or after July 1, 2001
Reduces from 12 to “9 payments made within 20 days of due date” to successfully rehabilitate and sets GA collection costs at 18.5%
Reinstates expired multiple disbursement and 30-day delay waivers
Budget Reconciliation – Key Higher Education Provisions Makes active duty military
independent Clarifies that loss of eligibility only
for drug-related offenses while enrolled
Modifies need analysis formula and expected family contribution
Modifies distance education rules
Budget Reconciliation – Key Higher Education Provisions Limits direct disbursement of FFEL
loans for students studying abroad Requires that Federal Direct Loan
repayment plans, other than income contingent, be consistent with FFELP
Provides for false cert discharge for victims of identify theft
Budget Reconciliation – Key Higher Education Provisions Makes permanent Taxpayer-Teacher
Protection Act provisions relating to increased loan forgiveness amounts and provides loan forgiveness for “competent” private school teachers
Makes permanent Taxpayer-Teacher Protection Act provisions eliminating 9.5% floor loans and eliminates “recycling” of most tax-exempt bonds
Budget Reconciliation – Key Higher Education Provisions Consolidation Loans –
Retains single holder rule Eliminates spousal consolidation Eliminates in-school consolidation Limits consolidation from FFEL to Federal
Direct Loan Program Requires same terms for FFEL and Federal
Direct consolidation loans Maintains current fixed interest rate for
consolidation loans
Budget Reconciliation – Key Higher Education Provisions Retains 6.8% fixed Stafford interest rate PLUS interest rate set to fixed 8.5% rate Phases down FFELP Stafford origination
fees to 0% by 7/1/2010 Requires deposit of 1% default fee into
GA’s Federal Fund Phases down Federal Direct Loan
origination fees to 1% by 7/1/2010
President’s FY 2007 Budget Request Title IV Program Budgets
AppropriationsFY 2005 FY 2006 FY 2007*(AY 05-06) (AY 06-07) (AY 07-08)
Pell Grant $12,364,997,280 $13,045,230,000 $12,738,770,000 (Max Award) $4,050 $4,050 $4,050
FSEOG $ 778,720,000 $ 770,932,800 $ 770,932,800
FWS $ 990,257,056 $ 980,354,485 $ 980,354,485
Perkins $ 66,131,680 $ 65,470,363 $ -
LEAP $ 65,643,000 $ 64,987,000 $ -
Acad Comp& SMART $ - $ 790,000,000 $ 850,000,000
Program
* President's FY 2007 Budget Submission
President’s FY 2007 Budget Request Title IV Program Budgets
Aid AvailableFY 2006 FY 2007*
(AY 06-07) (AY 07-08)Pell Grant $ 12,745,900,000 $ 12,986,000,000 (Max Award) $4,050 $4,050
FSEOG $ 975,900,000 $ 975,900,000 FWS $ 1,172,000,000 $ 1,172,000,000 Perkins $ 1,135,000,000 $ 133,000,000 LEAP $ 165,000,000 $ - AC/SMART $ 790,000,000 $ 850,000,000 Loans $ 60,577,000,000 $ 66,082,000,000 TOTAL $ 77,560,800,000 $ 82,198,900,000
Program
* President's FY 2007 Budget Submission
President’s FY 2007 Budget Request
Federal Pell Grant Program Proposals Maximum award for 2007-2008
remains at $4050 Year-round Pell Grants Eligibility limited to equivalent of 16
semesters Tuition sensitivity award rule
President’s FY 2007 Budget Request
Campus-Based Programs Proposal No proposed changes for FSEOG and
FWS Programs Perkins Loan Program
No funding for Federal Capital Contribution or Loan Cancellation
Recall Federal portion of loan repayments Work with Congress on the future of the
program
President’s FY 2007 Budget Proposal
No changes to FFEL and Direct Loans
No funding requested for LEAP GEAR UP Upward Bound Talent Search Byrd Honors Scholarship
Higher Education Act Extension Legislation
Higher Education Extension Act of 2005 – P.L. 109-150 Extends the HEA through March 31,
2006 Higher Education Extension Act of
2006 – P. L. 109-212 Extends the HEA through June 30, 2006
HEA Reauthorization? House Education Committee now
chaired by Rep. McKeon (R-CA) Reauthorization provisions not
contained in reconciliation will comprise reauthorizing legislation
House passed H.R. 609 on March 30 Senate has yet to act
Perkins Loan Program Reauthorization Proposals
H.R. 609 – passed the House on March 30 by a vote of 221-199
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
Perkins Loan Program 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 Requires Secretary to authorize
compromise repayment on defaulted loans
Perkins Loan Program Reauthorization Proposals
S. 1614 – Federal Perkins Loan Program Perkins Loan Program is reauthorized Eliminates “written” forbearance
request Removes “defense of infancy” as
borrower defense against repayment
Perkins Loan Program 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
Hurricane Legislation and Guidance
Pell Grant Hurricane & Disaster Relief Act (Pub. L. 109-66)
Student Grant Hurricane Disaster Relief Act (Pub. L. 109-67)
Waives repayment of Pell & TIV grants for Hurricane-related withdrawals
Dear Colleague Letter GEN-05-07 (Pub. 11-09-05)—Waiver guidance
Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-09
(Published May 11, 2006) – Eligibility for Title IV Program Assistance for Victims of Human Trafficking
HHS must certify an individual as a victim of human trafficking & issue certification/eligibility letter
FAA must confirm HHS certification
Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-04
(Published April 5, 2006) Process and operational information on
the Academic Competitiveness Grant ED notifies applicant and applicant’s school
of potential eligibility Website listing “rigorous” curriculum
provided to applicant School obtains appropriate documentation
and submits payment records to ED
Recently Published Dear Colleague Letters Dear Colleague GEN-06-04 (cont.) Process and operational information
on National SMART Grant ED will publish list of eligible majors School has information needed to
identify Pell-eligible applicants who are majoring in designated subject area
School establishes eligibility/submits payment information
Recently Published Dear Colleague Letters
Dear Colleague Letter GEN-06-06 (Published May 2, 2006) – Provides a list of academic majors eligible for the National SMART Grants for the 06-07 award year
Dear Colleague Letter GEN-06-08 (Published May 3, 2006) – Additional implementation guidance for ACG and National SMART Grant Programs
Recently Published Dear Colleague Letters
Dear Colleague Letter GEN-06-05 (Published April 27, 2006) – Changes made by the HERA to: Student and Institutional Eligibility Student Assistance General Provisions
Recently Published Dear Colleague Letters Dear Colleague Letter GEN-06-02 &
FP-06-01 (Published March 10, 2006)— Enactment of the Higher Education Reconciliation Act of 2005 ("the HERA"), Pub. L. 109-171 – Revised March 14, 2006
Topics that affect institutions/borrowers and lenders/guaranty agencies
Recently Published Dear Colleague Letters Dear Colleague Letter FP-06-05
(Published April 25, 2006) – Promissory Note Addenda & Revised Plain Language Disclosures for FFEL Program Loans
Guidance on awarding Federal PLUS Loans to Graduate and Professional Students
Recently Published Dear Colleague Letters Dear Colleague Letter FP-06-03 (Pub.
March 17, 2006) – Federal Family Education Loan Consolidation Loans
Reiterates and confirms the Department's position that, beginning April 1, 2006, it will enforce the single holder rule in the making of FFEL Consolidation Loans.
Recently Published Dear Colleague Letters Dear Colleague Letter GEN-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…..”
Recently Published Federal Register Notices
January 18, 2006 – Federal Register Notice inviting comments on renewal of FISAP Dear Colleague Letter CB-06-06 (Pub.
March 30, 2006)—DRAFT FISAP January 25, 2006 – Federal Register
Notice inviting comments on renewal of FFEL/DL/Perkins Loan Total and Permanent Disability Discharge Form
Recently Published Federal Register Notices
February 14, 2006 – Federal Register Notice inviting comment on renewal of the Federal Perkins Loan Program Master Promissory Note
February 21, 2006 – Federal Register Notice inviting comment on the renewal of the Federal Perkins Loan Program Assignment Package
Perkins Loan Program Management Issues Federal Perkins Loan Assignment
Package (forms and instructions) expires June 30, 2006
OMB Clearance process will propose: Retention of MPN disbursements records for
provision to ED, if needed, for enforcement after assignment
Elimination of requirement to renew a judgment before assignment
Submission of e-signature authentication process for electronically-signed prom notes
Perkins Loan Program Department of ED Contacts Assignment
[email protected] Campus-based Operations
FISAP – [email protected] Liquidation -- [email protected] Low Income Directory – [email protected]
Policy: [email protected] [email protected]
Policy/Operations: [email protected]
Perkins Loan Program Department of ED Contacts NSLDS: [email protected] [email protected]
Permanent & total disability assignments: [email protected]
Policy/Operations: [email protected]