1. Session C-34 Changes to the General Provisions Brian Kerrigan U.S. Department of Education

2. 2 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

3. 3 Negotiating Committees General Provisions Loans Academic Competitiveness & National SMART Grants Accreditation (Negotiations from December – June)

4. 4 General Provisions Package Consensus NPRM - Fed. Reg. Aug. 8, 07 (Part II)  Reflected the proposed regulatory language agreed to by the committee  22 public comments received by the end of the comment period (Sept. 7, 2007) Final rules – Fed. Reg. Nov. 1, 07 (Part III) Effective date  July 1, 2008  Early implementation

5. 5 Definitions Professional Degree Graduate or Professional Student Undergraduate Student Full-time Student Three quarter-time Student Half-time Student

6. 6 Professional Degree Above bachelor’s degree Generally requires professional licensure List of examples, including J.D., D.V.M., D.D.S., Pharm. D.

7. 7 Graduate/Professional Student Grad/Prof students cannot receive undergraduate level aid and graduate level aid at same time You can change a student’s status from “undergraduate” to “graduate or professional” once a student has completed at least 3 years at the undergraduate level

8. 8 Undergraduate Student For Perkins, FFEL, and DL programs, any student who takes courses at or below the baccalaureate level is an undergraduate student For Pell, ACG, SMART, and FSEOG, a student is only an undergraduate student if she is pursuing her first bachelor’s degree or below

9. 9 Undergraduate Student For Pell, a student who has a bachelor’s degree and is studying to earn a state- required teaching certification could be an undergraduate student For the first three years of a dual degree program, students are undergraduates For the first four years of a program lasting longer than five years that leads to a bachelor’s degree, students are undergraduates

10. 10 Full-time Student Moved the calculation from Pell Grant regulations (for Formula 3) to the General Provisions Also clarified the definition of a full-time student for correspondence programs

11. 11 Half-time/Three-quarter-time Student The existing definitions in the Pell Grant Program regulations were moved to the General Provisions regulations

12. 12 Other “Definitions” Independent study Substantially equal in length Successfully completes

13. 13 Independent Study Only applies to Direct Assessment Programs Course of study with predefined objectives determined by student & professor Requires regular and substantive interaction

14. 14 When A Recipient Does Not Begin Classes Consolidated the Return to Title IV requirements into the General Provisions You must return Title IV funds within 30 days of discovering that a student has failed to attend class You cannot disburse funds to any student you know will not be starting classes (e.g., a student who has been expelled)

15. 15 When A Recipient Does Not Begin Classes You are not required to return funds that are disbursed directly to a student in a study abroad program or one who is attending a foreign institution You must issue a final demand notice to these students

16. 16 Payment Period Credit hour programs with standard terms or terms that are substantially equal Credit hour programs with terms that are not substantially equal Credit hour programs w/o terms, or clock-hour programs The cohort default rate exemption Excused absences Re-entry w/i 180 days Re-entry after 180 days, or transfer

17. 17 Payment Period For credit-hour programs with standard terms or terms that are substantially equal, it’s the term For credit-hour programs with terms that are not substantially equal—  For grants and Perkins, it’s the term  For FFEL and DL, it’s ½ the credit hours and ½ the weeks For credit-hour programs w/o terms, or clock-hour programs, it’s ½ the (credit or clock) hours and ½ the weeks

18. 18 Payment Period When the cohort default rate is less than 10%, and the loan period is equal to or less than a single standard term or equal to or less than 4 months, it’s the loan period Excused absences count if—  There is a written policy  They do not exceed the lesser of  Accrediting agency policy,  State agency policy, or  10%

19. 19 Payment Period Re-entry w/i 180 days, stay in the same payment period Re-entry after 180 days, or transfer –  Start a new payment period, or  Remain in the same payment period,  Continuous enrollment,  Substantially similar coursework,  Substantially equal payment periods,  Little or no changes in charges, and  Credits are accepted in new program

20. 20 Minimum Period For A Loan Credit hour programs with standard terms or terms that are substantially equal with no term less than 9 weeks Clock hour programs, or credit-hour programs 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

21. 21 Minimum Period For A Loan For credit-hour programs with standard terms or terms that are substantially equal with no term less than 9 weeks, it’s the term For clock-hour programs, or credit-hour programs w/o standard terms and w/o terms that are substantially equal with no term 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

22. 22 Minimum Period For A Loan For transfer students, 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)

23. 23 Academic Year Progression Credit-hour programs with standard terms or terms that are substantially equal with no term less than 9 weeks Credit-hour programs with non-standard terms that are not substantially equal or each term is not at least 9 weeks, or credit-hour programs w/o terms Clock-hour programs

24. 24 Academic Year Progression For credit-hour programs with standard terms or terms that are substantially equal with no term less than 9 weeks, the student progresses when the academic year calendar period elapses

25. 25 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- hour programs w/o terms, the student progresses at the later of—  Completion of the weeks, or  Completion of the coursework

26. 26 Academic Year Progression For clock-hour programs, the student progresses at the later of  Completion of the weeks, or  Completion of the clock hours

27. 27 R2T4 Changes Confirmation not needed for post- withdrawal disbursement of grant funds Post-withdrawal disbursement of grant funds ASAP but no later than 45 days after the institution determines the student withdrew Post-withdrawal disbursement of loan funds ASAP but no later than 180 days after the institution determines the student withdrew

28. 28 R2T4 Changes 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 ½ the hours and ½ the weeks) —  Use the payment period that ends later, and  Attribute funds to the payment period that ends later

29. 29 Use of PP That Ends Later 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)

30. 30 Use of PP That Ends Later The withdrawal 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

31. 31 Attribution of Aid From PP 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)

32. 32 Total Title IV Aid Used In Calculation 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

33. 33 Requirements For Use of Formula 1 (Pell) Credit-hour programs 12 hours (or more) 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, or  Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly) where students are not in overlapping terms

34. 34 Pell Grant Formula 4 Calculation Credit-hour programs w/o terms, and clock- hour programs  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

35. 35 Pell Grant Formula 5 Calculation Correspondence programs w/o terms  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

36. 36 Requirements For Use of Formula 1 (ACG/SMART) Credit hour programs 12 hours (or more) 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, or  Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly) where students are not in overlapping terms

37. 37 ACG/SMART Formula 4 Calculation Credit-hour programs w/o terms, and clock- hour programs  Scheduled grant 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

38. 38 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

39. 39 Issuing a Check Issued on date mailed or date the student is notified Student has 21 days to pick up check After 21 days you must mail the check, initiate an EFT, or return the funds

40. 40 Electronic Disbursements You may have a policy requiring students to have a bank account However, if a student does not have or want an account, you must disburse funds in another way

41. 41 Electronic Disbursements ● If you open an account or actively assist the student in opening the account, you –  Must get the student’s written consent  Must inform the student of the terms and conditions  May not make any claims against the funds in the account  Must ensure that the student does not incur any cost in opening the account or in receiving a debit or stored-value card

42. 42 Electronic Disbursements  Must ensure that the student has convenient access to a branch office or ATM where the student will not incur any cost for cash withdrawals  May not limit the use of the card to certain vendors  May not market or portray the card as a credit card

43. 43 Minor Prior-year Charges Amount increases from less than $100 to not more than $200 But, the old regulatory language addressing the concept of paying for more than this amount “if the payment of those charges does not, and will not, prevent the student from paying his or her current educational costs” has been eliminated No need to get student’s permission for tuition and fee or room and board charges

44. 44 Minor Prior-year Charges Title IV aid is intended to be used for the period for which it is awarded Only $200 of current “year” aid may be used for prior “year” charges If a student has an FFEL or Direct Loan in his or her aid package, the year is the loan period. If a student does not have an FFEL or Direct Loan in his or her aid package, the year is the award year.

45. 45 Minor Prior-year Charges Charging for a program up front usually creates prior-year charges Charging by the payment period eliminates most prior-year charges A contract listing the total cost for a program does not mean that the institution has to charge the student the entire cost up front

46. 46 Late Disbursements Late disbursement period is extended from 120 to 180 days There are no late disbursements after 180 days

47. 47 Returning Unclaimed Funds Title IV funds never escheat to the state An un-cashed check must be returned no later than 240 days after it is issued If a check is returned or an EFT is rejected, you can make additional attempts to re-disburse  Attempts must be made no later than 45 days after the check is returned (or the EFT is rejected)  If no additional attempts are made, you must return the funds within the 45 days

48. 48 Loan Notice (With Confirmation) If you obtain affirmative confirmation, old loan notice and cancellation procedures apply, i.e., —  You must notify the student no earlier than 30 days before and no later than 30 days after crediting the account  The student has until the later of the first day of the payment period or 14 days after notification to cancel the loan

49. 49 Loan Notice (W/o Confirmation) If you do not obtain affirmative confirmation, new loan notice and cancellation procedures apply, i.e., —  You must notify the student no earlier than 30 days before and no later than 7 days after crediting the account  The student has 30 days after notification to cancel the loan

50. 50 Affirmative Confirmation Affirmative confirmation is a process where you obtain written confirmation of the types and amounts of Title IV loans the student wants for an award year It must be obtained before loan funds are disbursed It includes signed award letters and Web- based processes for accepting awards

51. 51 Excess Cash Title IV funds (except Perkins funds) that are not disbursed w/i three business days of receipt (includes previously disbursed funds that are re-deposited or transferred into your federal account as a result of an award recovery, adjustment, or cancellation) Only the 1% tolerance option is retained Finding may trigger cash monitoring or reimbursement

52. 52 Contact Information I appreciate your feedback and comments. I can be reached at: Phone: (202) 219-7058 Email: brian.kerrigan@ed.gov Fax: (202) 502-7874