session 10 general provisions update: changes made by the hera carney mccullough

Session 10

General Provisions Update: Changes

made by the HERA

Carney McCullough

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Student Eligibility

• Independent Student

• Repayment of Fraudulently Obtained Funds

• Drugs

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Independent Student

Individuals who are currently serving on active duty in the U.S. Armed Forces for purposes other than training are now considered to be independent students.

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Independent Student, cont’d.

• Includes applicants who have been called to

Federal active duty for purposes other than

training from the National Guard or Ready

Reserves.

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Independent Student, cont’d.

• For 2006-07 – Dependency Override

• For 2007-08 and beyond – FAFSA

• Student’s self certification is sufficient

documentation.

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Repayment of Fraudulently Obtained Funds

• A student who has been convicted of, or pled nolo

contendere or guilty to, a crime involving fraud in

obtaining Title IV aid must have completely

repaid the fraudulently obtained funds before

regaining eligibility for Title IV aid.

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School responsibility

• Don’t have to collect certification from each

student

• Handle when become aware of the situation

8

Drug Offenses

• Student is ineligible for Title IV aid only if the

conviction for a Federal or State offense involving

the possession or sale of a controlled substance is

for conduct that occurred during a period of

enrollment for which the student was receiving

Title IV aid.

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Drug Offenses, cont’d.

• Limits the timeframe

• Does not change the period of ineligibility

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• For 2006-07

– Beginning 6/30/06, FAFSA on the Web has a revised

drug conviction question and worksheet

– Around 6/30/06, ED sent a special notice to applicants

with total or limited ineligibility so they can determine

if their response should be changed

– Schools may, but are not required to identify applicants

whose eligibility may have been restricted because of

their response to the drug conviction question

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• For 2007-08 and beyond

– FAFSA and worksheet will reflect the new

provisions.

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Need Analysis

• Cost of Attendance (COA)

• Estimated Financial Assistance (EFA)

• Expected Family Contribution (EFC)

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Cost of Attendance (COA)

• An institution may exclude from both COA &

EFA any assistance provided by a State and

designated by the State to offset a specific

component of COA

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Cost of Attendance, cont’d.

• An institution may choose to include room and

board in the COA for a less-than-half-time student

• Up to 3 semesters (or equivalent) with no more

than 2 semesters being consecutive

• Applies on an institution by institution basis

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• An institution may include in a student’s COA the

one-time cost of obtaining a first professional

license or certificate

• May only be provided one time per student

• Must be for direct costs for obtaining 1st license

or certification

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• Allowable direct costs include licensing exam fees

and costs of applying for and obtaining the license

• Does not include costs associated with preparing

for an exam unless part of eligible program

• Costs must be incurred while student is enrolled

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Estimated Financial Assistance (EFA)

• Revised definitions of EFA and Resources

• Renamed “resources” as EFA for campus-based

programs

• Included ACG and National SMART Grants and

Chapter 1607, Reserve Education Assistance

Program benefits

• Standardized definitions

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EFC – Dependent Students

• IPA

– Increased income protection allowance to

$3,000 for the 2007-08 award year

– The $3,000 IPA will be indexed for inflation

beginning with the 2008-09 award year

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EFC – Dependent Students, cont’d.

• Contribution from assets

– Assessment rate for contribution from assets is

reduced to 20%

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EFC – Independent Students Without Dependents (other than a spouse)

• IPA

– Increased income protection allowance

• Single students and married with spouse in college

to $6,050

• Married with spouse not in college to $9,700

– These new IPAs will be indexed for inflation

beginning with the 2008-09 award year

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EFC – Independent Students Without Dependents (other than a spouse), cont’d.



reduced to 20%

22

EFC – Independent Students With Dependents (other than a spouse)



reduced to 7%

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EFC – Treatment of Qualified Education Benefits

• The term “qualified education benefits” includes

– Coverdell Education Savings accounts

– Prepaid tuition plans offered by a State

– Qualified tuition programs (529 prepaid tuition

plans and 529 savings plans)

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EFC – Treatment of Qualified Education Benefits, cont’d.

• Makes the treatment consistent in need analysis

• Are not treated as an adjustment to COA or as

estimated financial assistance in packaging

• Treated as assets of the owner of the plan unless

owned by dependent student

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• If owned by dependent student, not counted

• If plan owned by someone whose information is

not included on the FAFSA, not counted

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• Value of asset reported –

– For savings plans or savings accounts, the balance of the account on the date the FAFSA is signed.

– For prepaid tuition plans, the “refund” value of any tuition credits or certificates purchased. It is the amount the owner of the plan would receive if the account is liquidated. Available from plan administrator.

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• Value of all plans owned by the parent of

dependent applicant must be reported (such as

plans for the applicants siblings).

• Value of all plans owned by independent student

(and spouse) must be reported (such as plans for

children).

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• For 2006-07, if institution is aware that parents of dependent student or an independent student (or spouse) own a qualified education benefit, need to ensure that the value is included as an asset in the student’s EFC calculation. If institution has treated prepaid tuition plans as adjustments to COA or as EFA in packaging, must reverse those amounts and modify package accordingly.

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EFC – Means-Tested Federal Benefit Program

• May qualify if, in addition to meeting the relevant

income criteria, the student (or spouse) or

dependent student’s parent(s) received benefits

from one of the following means-tested Federal

benefit programs –

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EFC – Means-Tested Federal Benefit Program, cont’d.

– Supplemental security income (SSI) program

– Free and reduced price school lunch program

– Temporary assistance for needy families

(TANF)

– Special supplemental nutrition program for

women, infants, and children (WIC)

– Food Stamps

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• Receipt by anyone included in the household size

• Must be received in base year (may use

professional judgment to consider receipt after end

of base year)

• No required documentation – self-certification is

sufficient

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• Alternative to the tax return filing standard

– For 2006-07, if institution is aware that the student (or spouse) or dependent student’s parent(s) received benefits from a means-tested Federal benefit program, the institution must submit a work-around correction – “Correct” to “yes” the FAFSA question relating to eligibility to file a 1040A or 1040EZ (questions #34 and #72)

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EFC – Simplified Needs Test (SNT) and Auto Zero – Type of Tax Return

• Only the type of tax return filed by a dependent

student’s parents is considered for SNT and auto-

zero EFC calculations

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EFC – Simplified Needs Test (SNT) and Auto Zero – Type of Tax Return, cont’d.

• For 2006-07

– Modified our systems. All CPS transactions with a process date of May 24, 2006 or later used the revised criteria

– Reprocessed earlier applicants who met income criteria but not tax filing criteria of dependent student. Sent system-generated ISIRs to institutions

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EFC – Maximum Income Amount for Auto Zero EFC

• Raised maximum AGI to $20,000

• For dependent student, AGI of parents is used

• For independent students with dependents other

than a spouse, AGI of student and spouse is used

• Auto Zero EFC calculation is not available to an

independent student without dependents other than

a spouse

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EFC – Maximum Income Amount for Auto Zero EFC, cont’d.

• For 2006-07

– As of May 24, 2006, CPS began using new

income level when determining eligibility for

auto zero.

– Reprocessed earlier applicants who now are

eligible based on the increased income

threshold. Sent system-generated ISIRs to

institutions.

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EFC – Treatment of Small Business Assets

• Excludes from assets the net value of a family-

owned and controlled small business with not

more than 100 full-time or full-time equivalent

employees.

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EFC – Treatment of Small Business Assets, cont’d.

• For 2006-07, if the institution becomes aware that

a student or dependent student’s parents reported a

family-owned small business as an asset on the

FAFSA, it should assist the student in correcting

the net worth of investments fields (FAFSA

Questions #45 and #83).

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EFC – Updated Tables

• Income protection allowances are increased

annually based on inflation.

• For 2007-08, the Secretary’s estimate for inflation

is 2.8%.

• Under HERA, for 2007-08, and only for

independent students with dependents other than a

spouse, the IPAs will be increased 5%.

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EFC – Verification of Income Data

• Clarifies that the data ED may verify with IRS is

limited to the taxpayer ID, AGI, and tax filing

status reported on the FAFSA

• Authority not implemented at this time – will only

be implemented when an IRS match is authorized

under the Internal Revenue Code.

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Institutional Eligibility and Participation

• Distance Education

• Program Eligibility

• Academic Year Definition

• Return of Title IV funds

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Distance Education – Modification of the 50% Rules

• Prior to HERA, institutions that offered over 50%

of their courses via correspondence (or through a

combination of telecommunications and

correspondence) or enrolled 50% or more of their

students in such courses were ineligible to

participate in the Title IV programs.

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Distance Education – Modification of the 50% Rules, cont’d.

• Under HERA, courses offered by

telecommunications are not considered

correspondence and students enrolled in

telecommunications courses are not considered

correspondence students.

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• August 9, 2006 regulations

– New definition of telecommunications course –

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Telecommunications Course

A course offered principally through the use of one of

a combination of technologies including television,

audio, or computer transmission through open

broadcast, closed circuit, cable, microwave, or satellite;

audio conferencing, computer conferencing, or video

cassettes or discs to deliver instruction to students who

are separated from the instructor and to support regular

and substantive interaction between these

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Telecommunications Course, cont’d.

students and the instructor, either synchronously or

asynchronously. The term does not include a

course that is delivered using video cassettes or disc

recordings unless that course is delivered to

students physically attending classes at the

institution providing the course during the same

award year. If the course does not qualify as a

telecommunications course, it is considered to be a

correspondence course.

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• The 50% limits continue to be in effect for

correspondence courses and students

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Distance Education – Programs Offered in Whole or Part Via Telecommunications

• Eligible if –

– Programs are otherwise eligible

– Offered by a domestic institution accredited by

recognized agency that has distance education in its

scope of recognition

– Institution has been evaluated by the accrediting agency

and been determined to have the capability to

effectively deliver distance education programs

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• Programs offered by foreign schools through

distance education are not eligible programs.

However, participating foreign schools may use

telecommunications technology to supplement and

support instruction.

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• Students in short-term certificate programs of less

than one year offered by telecommunications are

now eligible for Title IV aid.

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Distance Education – Accrediting Agency Scope of Recognition

• Sent Dear Colleague letter in August 2006 to

institutions that rely, for Title IV eligibility, on an

accrediting agency that does not have distance in

its scope of recognition

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Distance Education – Accrediting Agency Scope of Recognition, cont’d.

• Posted informational copy on IFAP

• Actions that the institution may need to take if it

offers distance education

• Institutions that did not receive the letter do not

need to take action

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Program Eligibility – Direct Assessment Programs

New type of eligible program- instructional

program that uses direct assessment of student

learning or recognizes the direct assessment of

student learning by others, rather than credit or

clock hours.

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Program Eligibility – Direct Assessment Programs, cont’d.

• Assessment consistent with accreditation

• Merely giving credit for direct assessment does

not constitute instruction.

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Direct assessment of student learning means a measure by

the institution of what a student knows and can do in terms

of the body of knowledge making up the education program.

These measures provide evidence that a student has

command of a specific subject, content area, or skill or that

the student demonstrates a specific quality such as

creativity, analysis or synthesis associated with the subject

matter of the program.

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• Examples of direct measures include –

– Papers

– Examinations

– Presentations

– Performances, and

– Portfolios

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• Have to determine equivalency with credit or

clock hours to demonstrate compliance with

regulatory requirements in the following areas –

– Academic year

– Payment period

– Week of instructional time

– Enrollment status (Full-time,half-time, ¾ time)

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• Provide information to the Secretary including –

– The educational program and field of study

– How the assessment of learning is conducted

– How the program is structured

– How the institution assists students in gaining

knowledge to pass the assessments

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– Equivalency in terms of credit or clock hours

– Methodology used to determine equivalency

– Documentation from the accrediting agency

– Any other information needed

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• ED will determine initial eligibility for each program

• Also must meet other eligible program requirements in

668.8

• Direct assessment programs at foreign schools are not

eligible

• A direct assessment program may use learning resources

provided by other entities without regard to the contracting

out limits in 668.5

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• Title IV funds may only be used for learning

resulting from instruction provided or overseen by

the institution – not for part of the program the

student demonstrated mastery of prior to

enrollment or tests that are not associated with

education activities overseen by the institution.

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• Title IV funds may not be used for remedial

coursework (668.20) or for preparatory

coursework or teacher certification programs

(668.32(a)(1)(ii)) offered by direct assessment.

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Academic Year Definition

• A minimum of –

– 30 weeks of instructional time for a credit hour

program, and

– 26 weeks of instructional time for a clock hour

program; and

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Academic Year Definition, cont’d.

• For an undergraduate program, at least –

– 24 semester or trimester credit hours, or

– 36 quarter credit hours, or

– 900 clock hours.

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Return of Title IV Aid

• HERA modifications –

– Completion of 60% of the period (clock hour

programs)

– Grant overpayment requirements

– Leaves of absence

– Post-withdrawal disbursement counseling

– Return of funds within 45 days

– Use of scheduled clock hours

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Thank you.

We appreciate your feedback and comments.

I can be reached at:

• Phone: (202) 502-7639

• Fax: (202) 502-7874

• Email: [email protected]

session 10 general provisions update: changes made by the hera carney mccullough

Documents

title iv aid

coa efa

fundsa student

independent students

students coa

allowable direct costs

state offense

federal active duty