1. Gearing up for Reauthorization of the Higher Education Act: Work of NASFAA’s Task Force Ron Day, NASFAA Chair Reauthorization Task Force Richard Heath, NASFAA Board Member Reauthorization Task Force Loan Issues Sub Committee EASFAA May 8, 2013

2. Task Force Members NameRegionInstitutionSector Richard HeathEASFAAAnne Arundel CC2-Yr. Public Mark LindenmeyerEASFAALoyola Univ, Maryland4-Yr. Private Michael PedeEASFAASUNY Upstate Medical UnivGrad/Prof. Thomas BabelMASFAADeVry, Inc.Proprietary Laurie WolfMASFAADes Moines CC2-Yr. Public Robert GamezRMASFAAKansas State Univ4-Yr. Public Craig MunierRMASFAAUniv of Nebraska4-Yr. Public Bonnie JoerschkeSASFAAUniv of Georgia4-Yr. Public Brent TenerSASFAAVanderbilt Univ4-Yr. Private Frank ValinesSASFAAFlorida International Univ4-Yr. Public 2NASFAA Reauthorization Task Force 2012

3. Task Force Members NameRegionInstitutionSector Governor JacksonSWASFAATexas Woman’s Univ4-Yr. Public Kay SoltisWASFAAPacific Lutheran Univ4-Yr. Private Georgette DeVeres WASFAAClaremont McKenna Coll4-Yr. Private Patricia HurleyWASFAAGlendale CC2-Yr. Public George ChinAdvisorAASCUHigher Ed. Assn. Dan MadzelanAdvisorRetired, Office of Postsecondary Education Fed. Government Ron Day, NASFAA National Chair SASFAAKennesaw State Univ4-Yr. Public Pam Fowler, Past National Chair MASFAAUniv of Michigan4-Yr. Public 3NASFAA Reauthorization Task Force 2012

4. NASFAA Staff Justin Draeger, President & CEO Megan McClean, Managing Director of Policy & Federal Relations Joan Berkes, Senior Policy Analyst (RTF Project Director) Karen McCarthy, Policy Analyst 4NASFAA Reauthorization Task Force 2012

5. Task Force Process Gather member comment in listening sessions Identify themes running through comments Revisit and update work of past Reauthorization Task Force Form into subcommittees by major themes Subcommittees recommend issues for full Task Force debate Meet in person and by conference call 5NASFAA Reauthorization Task Force 2012

6. Contribution from the Membership 670 comments from 37 sessions at State, Regional, National conferences, forums, etc., through Feb. 2013 Need Analysis 24%Pell Grant 6% Loans 23%Administrative Burden 6% R2T4 9%Verification 5% Miscellaneous 8%FAFSA 3% Programs 7%Campus-Based Aid 2% Consumer Information 7% 6NASFAA Reauthorization Task Force 2012

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8. Contribution from the Membership Need Analysis Include all income…14% Use prior prior year…13% (opposed: 1%) Include more assets, in formula or as PJ…10% Change use of negative AGI…6% Review noncustodial parents…6% Redefine “couple”…5% Auto zero reform…5% 8NASFAA Reauthorization Task Force 2012

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10. Contribution from the Membership Loans Loan limits – Let schools limit loans…26% (opposed: 2%) – Set loan limits by sector…11% – Eliminate current proration…9% – Set or prorate by enrollment status…8% Curtail private loans by: – Adjusting Federal loan interest rates…11% – Raising Federal loan limits…7% Create more options for repayment…9% 10NASFAA Reauthorization Task Force 2012

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12. RTF Subcommittees Need Analysis & FAFSA Loans & SAP R2T4 – Also Verification, Administrative Burden Consumer Information – Also Pell, C-B Aid, Programs, General Provisions Full Task Force—Everything! 12NASFAA Reauthorization Task Force 2012

13. RTF Presentation to Board of Directors 1.Presentation of recommendations – Subcommittee chairs, by topical area 2.Initial vote – If >2/3 majority in favor, recommendation approved 3.Discussion – If <2/3 in favor, 10 minute discussion period 4.Final Vote – Approve – Reject – Return to Task Force for further work 13NASFAA Reauthorization Task Force 2012

14. RTF Presentation to Board of Directors Need Analysis recommendations 13 approved 1 rejected 2 returned to Task Force – Definition of “dependent” in family size – Treatment of unmarried partners or single sex couples 14NASFAA Reauthorization Task Force 2012

15. Need Analysis Approved Use prior prior year (PPY) data Eliminate Simplified Need Test Eliminate dislocated worker as qualifier for Auto Zero Add SSI, TANF, and General Relief benefits as sole qualifiers for Auto Zero 15NASFAA Reauthorization Task Force 2012

16. Need Analysis Treat Foreign Income Exclusion as untaxed income Adjust treatment of certain “paper” tax losses that cause negative AGI Eliminate exclusions of small business and family farm assets (discussion continues…) 16NASFAA Reauthorization Task Force 2012

17. Need Analysis Reflect regional cost of living in Income Protection Allowance (IPA) Revise independent student definition related to homelessness Strengthen school authority to set living costs in COA based on enrollment status or other factors 17NASFAA Reauthorization Task Force 2012

18. Need Analysis Expand and refine IRS Data Download to maximize use Explore use of technology to broaden use of FAFSA data and application process by states and institutions Conduct feasibility study to use tax return as an application for federal student aid 18NASFAA Reauthorization Task Force 2012

19. RTF Presentation to Board of Directors Loan recommendations 12 approved 1 reserved as a fall-back position subject to further development by Task Force RTF directed to incorporate relevant Indebtedness Task Force (ITF) recommendations 19NASFAA Reauthorization Task Force 2012

20. Loans Fall Back/ Develop Further: Loan Limits Eliminate year-related differences in loan limits Increase annual and aggregate limits Step aggregate: lower limit for first 2 years Prorate limits based on enrollment status Simplify the sub/unsub structure of loan limits 20NASFAA Reauthorization Task Force 2012

21. Loans Approved Reform interest rates (market-based stability) Eliminate loan fees Increase flexibility for schools to reduce loan amounts by school-defined categories Eliminate proration for remaining periods Separate Grad PLUS and Parent PLUS programs 21NASFAA Reauthorization Task Force 2012

22. Loans Allow unequal loan disbursements Reinstate cost-neutral repayment incentives Allow late origination after enrollment ends Restrict consolidation to single holder/payment and default prevention purposes – Allow separate refinance provisions Reinstate loan subsidies – Coordinate with ITF recommendations 22NASFAA Reauthorization Task Force 2012

23. RTF Presentation to Board of Directors Pell Grant recommendations 3 approved 1 returned to Task Force – Year-round Pell 23NASFAA Reauthorization Task Force 2012

24. Federal Pell Grant Program Approved Make Pell Grant a true entitlement Eliminate tie to default rates Allow 1 more payment beyond LEU to enable completion 24NASFAA Reauthorization Task Force 2012

25. RTF Presentation to Board of Directors Campus-based program recommendations 6 approved 1 remains in development at Task Force request – Allocation formula 25NASFAA Reauthorization Task Force 2012

26. Campus-Based Programs Approved Increase flexibility on transfers of funds Revise distribution of school’s Perkins Fund if program ends Expand FWS definition of community service 26NASFAA Reauthorization Task Force 2012

27. Campus-Based Programs Set aside funds for community service based on separate request Eliminate private sector employment cap Tie FSEOG eligibility to Pell-eligible EFC range rather than actual receipt, and eliminate lowest EFC order 27NASFAA Reauthorization Task Force 2012

28. RTF Presentation to Board of Directors General provisions recommendations 7 approved 1 remains in development at Task Force request – Issuance of final report of program review – Pending school survey 28NASFAA Reauthorization Task Force 2012

29. General Provisions Increase overaward tolerance and include DL Restore earned credit ability-to-benefit Eliminate tie to Selective Service registration Eliminate tie to drug convictions 29NASFAA Reauthorization Task Force 2012

30. General Provisions Maximize consistency of reinstatement of student eligibility among programs Accept data base match as documentation for I-9 employment eligibility verification Allow payment of currently non-automatic allowable charges unless student opts out 30NASFAA Reauthorization Task Force 2012

31. RTF Presentation to Board of Directors Consumer Information recommendations 4 approved 31NASFAA Reauthorization Task Force 2012

32. Consumer Information Require review of current requirements and restrict to undergraduates Shift provision of loan disclosures to ED and/or servicers Decouple Constitution Day, voter registration, athletic disclosures Shift requirement to provide State assistance information to central Federal site 32NASFAA Reauthorization Task Force 2012

33. RTF Presentation to Board of Directors R2T4 recommendations 11 approved 33NASFAA Reauthorization Task Force 2012

34. Return to Title IV Funds Restrict law and regulation to undergraduates Narrow definition of schools that are required to take attendance Continue to require that schools have an accessible, publicized withdrawal procedure that recognizes student’s withdrawal as date he/she initiates that procedure. 34NASFAA Reauthorization Task Force 2012

35. Return to Title IV Funds Allow school to set withdrawal date for students unofficial withdrawals Continue pro-rata approach but simplify the rules and use weeks rather than days Put parameters in law rather than details; clarify school discretion 35NASFAA Reauthorization Task Force 2012

36. Return to Title IV Funds Restore institution’s authority to determine post withdrawal disbursement Modify assumption that Title IV aid is applied to institutional charges first Increase from 45 to 60 days period of time school has to return funds 36NASFAA Reauthorization Task Force 2012

37. Return to Title IV Funds Amend the order of return language and make it subject to regulation Direct ED to solicit public input on ways to decrease burden and complexity of R2T4 regulations and procedures, and to conduct a subsequent negotiated rulemaking session devoted solely to R2T4 37NASFAA Reauthorization Task Force 2012

38. Additional Areas To Be Considered??? 38NASFAA Reauthorization Task Force 2012