2012 OrACRAO Meeting Sunriver Resort, Sunriver, Oregon Kathy Campbell, Dean of Enrollment Services and Financial Aid, Chemeketa Community College; Mike Johnson, Financial Aid Director, Pacific University

 College Cost Reduction and Access Act of 2007  Higher Education Opportunity Act of 2008  Program Integrity Regulations (October 29, 2010)  Budget Control Act of 2011  Department of Defense and Full Year Continuing Appropriations Act  Consolidated Appropriations Act – 2012  President’s FY 2013 Budget

 Decreased, by annual increments, Federal Direct subsidized Loan interest rates for undergraduate borrowers from 6.8% for to 3.4% for ◦ This law is scheduled to sunset on July 1, 2012 (but stay tuned…)

 Authorized two Federal Pell Grants in an academic year for eligible students  Authorized an IRS data match for FAFSA filers ◦ The need for this data match had been discussed for several years

 Required colleges to adopt more specifically defined and standardized policies for monitoring students’ Satisfactory Academic Progress. The new regulations: ◦ Define “Financial Aid Warning” and “Financial Aid Probation” ◦ Specify how pace of progression and maximum time-frame must be measured ◦ Specify the kinds of information that students’ appeals must include for continued aid eligibility

 Created new requirements for students selected for federal verification to document their income ◦ Selected students must successfully use the IRS Data Retrieval Process to populate the income information on their FAFSA – or – provide the school with an official IRS Tax Return Transcript; schools can no longer accept copies of tax returns ◦ Schools may update a student’s marital status if the new status will change the student’s dependency status ◦ Increased complexity is planned for

 Effective for loan periods beginning on or after July 1, 2012, eliminates subsidized loans for graduate students ◦ Previously, graduate students who demonstrated sufficient federally defined “need” could borrow up to $8,500 per year in subsidized loans ◦ All Federal Direct Loans for graduate students will now begin accruing interest at 6.8% upon disbursement ◦ This change will increase the cost of education for all graduate student borrowers

 Effective for loans first disbursed on or after July 1, 2012, eliminates Federal Direct Loan repayment incentives ◦ As a result, borrowers’ disbursements will be reduced by fees of 1% for subsidized and unsubsidized loans, and 4% for PLUS loans ◦ A 0.25% interest rate reduction of electronic payments remains in place

 Removed students’ eligibility for a second Federal Pell Grant in the same academic year ◦ This change had been requested in the President’s FY 2012 Budget ◦ As you’ll recall from an earlier slide, this increased aid for the neediest undergraduates – that was intended to allow them to complete their educational programs more quickly – only lasted three years

 Effective July 1, 2012, eliminated Title IV eligibility for new students who have not earned a high school diploma or GED. ◦ Previously, students could establish eligibility by passing an Ability to Benefit test, or successfully completing six college credits or 225 clock hours ◦ An exception is in place for home schooled students and currently enrolled students ◦ As you can imagine, this change affects a disproportionate number of students attending community colleges

 Effective July 1, 2012, reduced the duration of a student’s Federal Pell Grant eligibility to 12 semesters or its equivalent ◦ Previously, students could receive a Federal Pell Grant for up to 18 semesters ◦ Affects new and currently enrolled students; calculations include all earlier years of students’ Federal Pell Grant disbursements ◦ Again, community college students are likely to be the most affected

 For new Federal Direct subsidized Loans disbursed between July 1, 2012 and June 30, 2014, eliminates the interest subsidy during the borrower’s six month grace period ◦ Previously, interest did not accrue on the borrower’s loans until he or she entered repayment at the end of the grace period ◦ This change will increase the cost of education for undergraduate students who demonstrate the most federally defined “need”

 Requests a one-year extension of the current 3.4% Federal Direct subsidized Loan interest rate for undergraduate borrowers ◦ Bills to accomplish this are currently being considered by the House and Senate; the two sides do not yet agree on how to fund it  Requests a limit on the duration of the Federal Direct Loan in-school interest subsidy to 150% of the normal time to complete the borrower’s educational program

 USED’s Information for Financial Aid Professionals page at: ◦  Your friendly financial aid professionals at any college or university