The Higher Education Opportunity Act of 2008 (HEOA) requires institutions to post a net price calculator (NPC) on their web sites by August 2011. The National Center for Education Statistics (NCES) is required to provide a template for this calculator by August 2009. The HEOA permits institutions to use the net price calculator developed by the NCES or to develop their own calculator — as long as this calculator includes “at a minimum the same data elements” found in the NCES calculator.

June 17, 2009

Beginning 7/1/09 federal student loan borrowers can take advantage of the new Income Based Repayment (IBR) Option available to assist with repayment. Borrowers with high debt and lower income levels can benefi t from this option especially during these economic times. Borrowers also pursuing careers in public service can benefi t from this option.

Monthly payments are based on income, not level of indebtedness. For example, a borrower ith a total  indebtedness of 40,000.00 in federal loans would generally be required to pay  $ 460.32/month with a standard 10 year repayment plan. If that borrower’s AGI was 35,000.00 /year they could take advantage of IBR and cap their monthly payment at $ 234.44/month. Documentation regarding a borrower’s annual income level must be collected by the lender or servicer in order to process the IBR option for a borrower. The IRS is working on electronic communication options for this but in the interim, paper needs to be exchanged. Until electronic communication is available the DOE is allowing lenders to request borrowers submit a copy of their most recent federal tax return with an original “pen and ink” signature. However, lenders have the option to obtain written certifi cations from borrowers or other documentation to verify income information.  Additional information on this topic is available in a DOE Electronic Announcement posted 6/12/2009

by Jeff Baker, Director Policy Liaison and Implementation, Federal Student Aid

HEOA section 480(j)(1) of the Higher Education Act was originally changed to exclude veterans education benefits  as an estimated financial aid resource effective 7/1/2010.   On 7/1/2009 President Obama signed H.R. 1777 making technical corrections to move the effective date to 7/1/2009 for the 2009-2010 award year.  Institutions may no longer consider any Federal veterans education benefits as a  financial aid resource for the student. This includes all benefits received by the veteran, his/her spouse and his/her dependent. Veteran education benefits continue to not be  considered as an income source in calculating the EFC for the student.  All institutions must re-review and if necessary make updates and repackage all students receiving Federal veterans education benefits for the 2009-2010 award year.  Any loans already processed for the 2009-2010 award year for the FFEL or Direct Loan programs would need to be reprocessed as well if eligibility has changed.

Student bankruptcy is an ongoing problem for the multitude of student loan programs. To address this problem, Congress passed 11 U.S.C.Sec 523(a)(8) of the Bankrupcy Code. Sec. 523(a)(8) states:

(a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this Title does not discharge an individual debtor from any debt…(8) for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or part by a governmental unit or nonprofit institution, or for any obligation to repay funds received as an educational benefit, scholarship or stipend unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependents. Read the rest of this entry »

We all know the 5 key data items necessary for verification but it helps to be reminded of the “oddballs”. Those “when was the last time I saw that” items. Read the rest of this entry »

President Obama’s Fiscal Year 2010 budget proposes that, beginning July 1, 2010, all Stafford (subsidized and unsubsidized), PLUS, and Consolidation loans will be made from the William D. Ford Federal Direct Student Loan (Direct Loan) Program. Thus, ending, as of that date, any new loans made under the Federal Family Education Loan (FFEL) Program.

This proposal would make college loans reliable, stable and efficient, thus eliminating uncertainty families have experienced due to the turmoil in the financial markets. All new student and parent loans would be provided directly from the federal government through the same electronic system that colleges use for Pell Grants. Taxpayers would save more than $4 billion a year in reduced entitlement subsidies, funds that can be invested in more grant aid to students seeking a higher education. The Direct Loan Program would continue to use private sector companies to perform origination, servicing, loan collections, and related services through performance-based contracts with the Department of Education. Read the rest of this entry »

Final regulations regarding changes and clarifications to FERPA were published in December 2008 and became effective on January 8, 2009. Many of these changes and clarifications are an effort to improve school safety, open access to data for research and accountability purposes and improve the safeguarding of educational records.

As a result, day-to-day questions and decisions to be made regarding FERPA and whether or not your institution is in compliance can be easier to manage. Read the rest of this entry »

Short on time but need help immediately? HEAG is pleased to announce a new service which will provide immediate help to you and at low cost called Short Term Staffing Solutions. Our consultants are available for short term assignments: 1-2 days, once a week or once a month. Special Low 2009 rates apply. Read the rest of this entry »

As each new academic year begins, it is important to review the legal obligations of the financial aid officer (FAO) regarding the administration of the Title IV and state funded financial aid programs. The following will address in general terms those duties and provide a context for the summaries of articles which will follow in the coming months. Read the rest of this entry »

In March of 2001, the Office of Student Financial Assistance (SFAP) of the U.S. Department of Education (DOE) issued a Final Audit Determination Letter (FADL) alleging that Armstrong Atlantic State University of Savannah, Georgia (the “College”) had violated the Title IV regulations by failing to calculate refunds for students who unofficially withdrew from the College. As unofficial withdrawals are a problem at many institutions, this case report is illustrative of DOE’s position and how these issues are dealt with by the administrative law judges.

In the FADL, SFAP asserted that the College did not have a system in place to identify those student who unofficially withdrew from the institution. This would include students who either unofficially withdrew from classes or never attended any classes in the first place. Read the rest of this entry »