core module 7 - campus-based funds - participant's handout

NASFAA

CORE2015-16

PARTICIPANT’SHANDOUT

Campus-Based Programs

Module 7

© 2008–2015 by National Association of Student Financial Aid Administrators (NASFAA). All rights reserved. NASFAA has prepared this document for use only by personnel, licensees, and members. The information contained herein is protected by copyright. No part of this document may be reproduced, translated, or transmitted in any form or by any means, electronically or mechanically, without prior written permission from NASFAA. NASFAA SHALL NOT BE LIABLE FOR TECHNICAL OR EDITORIAL ERRORS OR OMISSIONS CONTAINED HEREIN; NOR FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE FURNISHING, PERFORMANCE, OR USE OF THIS MATERIAL. This publication contains material related to the federal student aid programs under Title IV of the Higher Education Act and/or Title VII or Title VIII of the Public Health Service Act. While we believe that the information contained herein is accurate and factual, this publication has not been reviewed or approved by the U.S. Department of Education, the Department of Health and Human Services, or the Department of the Interior. NASFAA reserves the right to revise this document and/or change product features or specifications without advance notice. April 2015

© 2015 NASFAA i CORE

Module 7 – Campus-Based Programs Participant’s Handout Table of Contents

Campus-Based Programs ................................................................................................................................. 7-1

Application Process ..................................................................................................................................... 7-1 Campus-Based Programs Common Provisions .......................................................................................... 7-3

Federal Supplemental Educational Opportunity Grant Program-Specific Requirements .................................. 7-7 Student Eligibility ......................................................................................................................................... 7-7 Award Amounts ........................................................................................................................................... 7-7 Selection Groups ......................................................................................................................................... 7-7

Federal Work-Study Program-Specific Requirements ....................................................................................... 7-7 Student Eligibility ......................................................................................................................................... 7-7 Award Amounts ........................................................................................................................................... 7-8 Use of Funds ............................................................................................................................................... 7-8 Eligible Employment .................................................................................................................................... 7-8 Payments to Students .................................................................................................................................. 7-9 Community Service .................................................................................................................................... 7-10

Federal Perkins Loan Program-Specific Requirements ................................................................................... 7-11 Loan Types ................................................................................................................................................ 7-11 Program Status .......................................................................................................................................... 7-11 Use of Funds ............................................................................................................................................. 7-12 Student Eligibility ....................................................................................................................................... 7-12 Award Amounts ......................................................................................................................................... 7-12 Federal Perkins Loan Master Promissory Note ......................................................................................... 7-13 Pre-Disbursement Disclosures .................................................................................................................. 7-13 Exit Counseling .......................................................................................................................................... 7-14 Repayment Disclosures ............................................................................................................................. 7-15 Repayment ................................................................................................................................................ 7-16

Grace Period ........................................................................................................................................ 7-16 Deferment ............................................................................................................................................ 7-17 Forbearance ......................................................................................................................................... 7-18 Cancellation ......................................................................................................................................... 7-19 Discharge ............................................................................................................................................. 7-20

Default ....................................................................................................................................................... 7-20 Rehabilitation ............................................................................................................................................. 7-21

References for Campus-Based Programs ....................................................................................................... 7-23 Slides for Note Taking ..................................................................................................................................... 7-25

CORE ii © 2015 NASFAA

This page intentionally left blank.

© 2015 NASFAA 7 - 1 CORE

Campus-Based Programs Federal Supplemental Educational Opportunity Grant (FSEOG) Program Federal Work-Study (FWS) Program Federal Perkins Loan Program

Application Process A school applies to participate in the campus-based programs by completing an Electronic Application for

Approval to Participate in the Federal Student Aid Programs (E-App) or updating its E-App. A school annually must apply for campus-based program funds by submitting a Fiscal Operations Report

and Application to Participate (FISAP). A school also uses the FISAP to report how it spent campus-based funds during the previous award year.

Campus-Based Programs Common Provisions

Provision Federal Perkins Loan Program

Federal Work-Study (FWS) Program

Federal Supplemental Educational Opportunity Grant (FSEOG)

Program

Matching requirement

Institutional capital contribution (ICC) must be at least 1/3 of federal capital contribution (FCC)

No FCC has been provided for the Federal Perkins Loan Program since the 2006 fiscal year. A school can still elect to contribute an ICC to its Federal Perkins Loan revolving fund. (The revolving fund consists of loan payments made by former borrowers as the source of funding made available to current borrowers.)

Nonfederal share must be at least 25% of total FWS wages earned for work with public agency, private nonprofit organization, or school

Exceptions: No institutional match required if

school designated as a Title III or V eligible institution*

Federal share up to 90% permitted if: Public agency or private

nonprofit organization cannot afford full nonfederal share;

No ownership, operation, or control relationship exists between school and employing organization; and

No more than 10% of school’s total FWS recipients paid using higher federal share (total FWS recipients exclude those in positions exempt from nonfederal share requirement)

Nonfederal share must be at least 25% of total FSEOG awarded

Nonfederal share may be from institutional funds (e.g., grants, scholarships, tuition or fee waivers), nonfederal portion of grants and scholarships, or private grants or scholarships

May meet match on: Individual student basis (each

recipient receives appropriate ratio of nonfederal funds);

Aggregate basis (each recipient receives some federal funds; total FSEOG awarded comprises no more than 75% federal funds); or

Fund-specific basis (required nonfederal match deposited into FSEOG fund from which awards are made)

Exceptions: No institutional match required if

school designated as a Title III or V eligible institution*

*The Department of Education (ED) designates a school as a Title III or V eligible institution under the Strengthening Institutions Program, the American Indian Tribally Controlled Colleges and Universities Program , the Alaska Native and Native Hawaiian-Serving Institutions Program, the Asian American and Native American Pacific Islander-Serving Institutions Program, the Native American Serving Nontribal Institutions Program, the Developing Hispanic-Serving Institutions Program, the Hispanic-Serving Institutions STEM and Articulation Program, the Promoting Postbaccalaureate Opportunities for Hispanic Americans Program, and the Predominantly Black Institutions Programs.

© 2015 N

ASFAA 7

-3 C

OR

E




Program

Matching requirement (cont’d)

100% federal share permitted for work with school, public agency, or private nonprofit organization if student is: Performing family literacy

activities in literacy project serving families with preschool-age or elementary school children;

A reading tutor for preschool-age or elementary school children;

A mathematics tutor for children in elementary school through 9th grade; or

Performing civic education and participation activities in community service project

At least 50% nonfederal share for employment by private for-profit organization Employer must provide

nonfederal share Maximum of 25% of FWS

allocation may be used for employment by private for- profit organizations

CO

RE

7 - 4 © 2015 N

AS

FAA




Program

Transfer of funds between programs

May transfer up to 25% of FCC to FSEOG and/or FWS

School must have level of expenditure (LOE) from ED for the award year

May transfer total Federal Perkins Loan allocation to school’s Work-Colleges Program

Any funds transferred and unexpended at end of award year must be transferred back

May transfer up to 25% of total FWS allocation to FSEOG and/or Federal Perkins FCC


May transfer up to 25% of total FSEOG allocation to FWS


Carry-forward and carry-back options

Not applicable Carry forward up to 10% of total FWS current award year allocation for expenditure in next award year Must spend funds carried

forward before spending current award year funds

Carry back up to 10% of total FWS current award year allocation for preceding award year FWS expenditures

Must match FWS funds carried forward or carried back in the award year that they are spent

Carry back any portion of FWS current award year allocation to pay wages earned on or after May 1 of preceding award year but prior to start of current award year, July 1, in addition to 10% carry-back allowance

Carry forward up to 10% of total FSEOG current award year allocation for expenditure in next award year Must spend funds carried forward

before spending current award year funds

Carry back up to 10% of total FSEOG current award year allocation for preceding award year FSEOG expenditures

Must match FSEOG funds carried forward or carried back in the award year they are spent

Carry back any portion of FSEOG current award year allocation to make awards for payment period beginning on or after May 1 of preceding award year but ending prior to start of current award year, July 1, in addition to 10% carry-back allowance

© 2015 N

ASFAA 7 - 5 C

OR

E




Program

Use of funds for independent and part-time students

Must offer reasonable portion of allocation for awards to independent and part-time students if allocation based directly or indirectly on financial need of such students Zero is not a reasonable portion A school cannot establish a policy that excludes part-time or independent students from the campus-based

programs

Administrative Cost Allowance (ACA)

May be claimed for each award year school receives an allocation of campus-based funds Amount based on total campus-based funds used to make Federal Perkins Loans, pay FWS wages, and award

FSEOG Of FSEOG awarded, may include only minimum required matching amount

May charge ACA against one or more campus-based programs from which disbursements were made for award year

May use ACA to pay costs for: Administering campus-based and Federal Pell Grant programs; Conducting school’s community service program (but only an amount up to 10% of ACA attributable to FWS); Training FWS tutors; Complying with Title IV consumer information requirements; Payment of staff salaries; Office items, such as furniture, supplies, and computer equipment; and Travel, such as for staff training

Underutilization of allocation

Annually must release unexpended allocation via ED campus-based reallocation process If more than 10% of campus-based program allocation is returned to ED, program’s allocation for succeeding

award year is reduced by the dollar amount returned May request waiver of underutilization penalty if underutilization is due to circumstances beyond school’s

control and not expected to recur (e.g., federally-declared disaster) To request a waiver, the school submits an explanation of the circumstances surrounding its inability to expend

all funds with its FISAP

CO

RE

7-6 ©

2015N

ASFAA


Federal Supplemental Educational Opportunity Grant Program-Specific Requirements

Student Eligibility A student must: Meet the Title IV general student eligibility criteria;

Students with intellectual disabilities and enrolled, or accepted for enrollment, in a comprehensive transition and postsecondary program do not have to meet Title IV criteria of being enrolled for the purpose of obtaining a degree or certificate and having completed high school or its equivalent

Demonstrate financial need; and Be enrolled, or accepted for enrollment, as an undergraduate student who has not yet earned a

bachelor’s degree. Although there is no minimum enrollment requirement, awards may be prorated for less-than-full-time

enrollment. Award Amounts Minimum annual award: $100. Maximum annual award: $4,000. Maximum award for students participating in a study abroad program approved for credit toward the

student’s degree: $4,400. Actual FSEOG award amounts may vary among institutions, dependent upon allocation amounts, the

number of eligible students, and packaging policies. Selection Groups First selection group: Award to students who will receive a Federal Pell Grant during the award year, in

priority order based on the lowest expected family contribution (EFC), that is, zero to the highest EFC. Second selection group: Award to students who will not receive a Federal Pell Grant during the award year,

from lowest to highest EFC order. Students who are ineligible to receive a Federal Pell Grant because they have reached or exceeded the

Lifetime Eligibility Used (LEU) are still eligible to receive FSEOG. Students who reach or exceed the LEU during an award remain in the first selection group for the

remainder of that award year. In subsequent award years these students are part of the second selection group.

An institution is prohibited from awarding FSEOG to any student not awarded in a selection group on the basis of professional judgment.

Federal Work-Study Program-Specific Requirements

Student Eligibility A student must: Meet the Title IV general student eligibility criteria;


Students with intellectual disabilities and enrolled, or accepted for enrollment, in a comprehensive transition and postsecondary program do not have to meet Title IV criteria of being enrolled for the purpose of obtaining a degree or certificate and having completed high school or its equivalent

Demonstrate financial need; and Be enrolled, or accepted for enrollment, as an undergraduate, graduate, or professional degree-seeking

student. There is no minimum enrollment requirement.

Award Amounts There is no statutory minimum or maximum award amount. A school calculates award amounts based on the amount of available funds, the number of eligible

students and their financial need, and its packaging policy. Use of Funds A school may use FWS Program funds to pay: The federal share of wages for students employed in eligible FWS positions; A reasonable amount for time spent in training related to FWS employment; A reasonable amount for time spent in travel directly related to employment in a FWS community

service position; Up to 80% of its Job Location and Development (JLD) Program costs (capped at $75,000) to develop

regular and community service positions for its students; and The costs of its Work-Colleges Program if the school participates in this program.

In addition, a school may: Carry-forward and carry-back funds between award years; Transfer funds to FSEOG and/or Federal Perkins Loan programs; and Draw down all or a portion of its ACA for an award year.

Eligible Employment Eligible FWS employers may be on or off campus and include: The school itself (certain restrictions apply if the school is a proprietary school); State or local public agencies if the work is in the public interest; Federal agencies, except ED, if the work is in the public interest; Private nonprofit organizations if the work is in the public interest; and For-profit organizations.

Regulations define work in the public interest as work performed for the national or community welfare rather than work performed to benefit a particular interest or group. Work is not in the public interest, if it:

Primarily benefits members of a limited membership organization such as a credit union, fraternal or religious order, or cooperative;

Is for an elected official who is not responsible for the regular administration of federal, state, or local government;

Is work as a political aide for any elected official; Takes into account the student’s political support or party affiliation when hiring the student;


Involves any partisan or nonpartisan political activity or is associated with a faction in an election for public or party office; or

Involves lobbying on the federal, state, or local level. If the school is not the employer, the school must have a written agreement with the employing

organization. A proprietary school may employ FWS students in: Community service jobs (on or off campus); and On-campus jobs providing student services that do not involve the solicitation of potential students.

FWS employment at a proprietary school or an off-campus for-profit organization should complement and reinforce the student’s educational program or vocational goals to the maximum extent practicable.

All FWS employment is governed by employment conditions (including pay) that are appropriate and reasonable according to the: Type of work performed; Geographic region; and Employee’s proficiency.

Federal, state, and local laws governing regular employment also apply to FWS. FWS employment may not be used to replace or displace regular employees. A student who receives academic credit for employment in a FWS position must: Be paid at the same rate as if no academic credit were received; Be paid only if the employer would normally pay others for performing the same work in the same

position; and Not be paid for receiving instruction in a classroom, laboratory, or other academic setting.

Payments to Students A student earns FWS wages as the work is performed. Original copies of timesheets or other records of hours worked on a daily basis must be certified by the

student’s supervisor and be maintained at the school, regardless of where students are employed; Undergraduate students must be paid on an hourly basis; Graduate students may be paid on an hourly basis or by salary; and The school is ultimately responsible to ensure students receive compensation for the work performed,

regardless of where students are employed. An FWS student must be paid at least: The greater of the federal, state, or local municipality minimum wage (a sub-minimum training wage is

not permitted); and Once monthly.

Payment may be made by a: Check or similar instrument; Credit to the student’s school account if the student has given his or her written authorization; Electronic funds transfer (EFT) to the student’s designated bank account; or Noncash contribution for the nonfederal share of wages (i.e., tuition and school-provided services and

equipment). The federal share of FWS wages may not be used to pay: Fringe benefits (e.g., sick leave, vacation pay, holiday pay); or


Any portion of the required employer’s share of Social Security, worker’s compensation, retirement benefits, or welfare or insurance programs.

If the nonfederal share of student student’s wages is paid in the form of noncash contributions, prior to the end of the student’s final payroll period, the institution must: Pay the nonfederal share of tuition, fees, services, or equipment; or Provide the student with a statement itemizing the amount of prepaid tuition, fees, services, or

equipment if the noncash contribution is for a forthcoming academic period. A school located in an area affected by a major disaster, as determined by ED, may pay disaster-affected

students for the time period in which the students are prevented from fulfilling their FWS obligation within the following restrictions: The time period cannot exceed the award period; The school still must meet matching requirements unless waived by ED; Payments must be equal to or less than the amount of FWS wages that the student would have earned

if the student had been able to complete his or her work obligation; and A “disaster-affected student” is a student enrolled at an eligible institution who:

Received a FWS award for the award year during which the major disaster occurred, Earned FWS wages for the award period prior to the disaster, Was prevented from fulfilling his or her FWS obligation for all or part of the award period due to the

major disaster, and Was unable to be reassigned to another FWS position.

Community Service A school must expend at least seven percent of its FWS allocation to compensate students employed in

community service positions. If a school receives additional FWS funds via the reallocation process, the school must spend at least

the greater of: 7 percent of its total FWS federal award year allocation; or 100 percent of the amount of its reallocated FWS federal funds.

A school also must employ at least one FWS student: As a reading tutor for preschool-age or elementary school children; or In a family literacy project performing family literacy activities.

ED may waive the FWS community service requirements if the: School requests a waiver; and Requirements would cause undue hardship for the school’s students.

Community services are those designed to improve quality of life for community residents, particularly low-income individuals and/or to solve problems related to their needs.

A school is encouraged to employ students in projects that focus on civic education and participation, including projects that teach civics in schools, raise awareness of government functions, and increase civic participation. To the extent practicable, the school must give priority to the employment of students in projects that

educate or train the public about evacuation, emergency response, and injury prevention strategies relating to natural disasters, acts or terrorism, and other emergency situations.

The school must ensure that students employed in such positions receive appropriate training.


Other types of community service positions may include, but are not limited to: Clerical or support positions at a food bank; Career counselors at a state unemployment office; Aides at on-campus childcare facility if the child care is open and accessible to the community; Service positions to prevent or control crime in the community; and Instructional aides who prepare materials for family literacy project activities.

Federal Perkins Loan Program-Specific Requirements Loan Types Types of loans made under Federal Perkins Loan Program include: National Defense Student Loans (Defense Loans); National Direct Student Loans (NDSLs); and Federal Perkins Loans.

All loans made before 7/1/72 were Defense Loans. A loan made on or after 7/1/87 and before 11/1/04 may have been either a NDSL or Federal Perkins Loan. A new loan was a NDSL if the borrower had an outstanding Defense Loan or NDSL balance when the

new loan was obtained. A new loan was a Federal Perkins Loan if the borrower had no outstanding Defense Loan or NDSL

balance when the new loan was obtained. All loans made on or after 11/1/04 are Federal Perkins Loans.

Program Status The Federal Perkins Loan Program is authorized through 9/30/15. Absent Congressional action, schools cannot make loans to new borrowers after this date. If a school makes the first disbursement of a 2015–16 loan to a student prior to 10/1/15, it can make the

remaining disbursements of the loan. The Higher Education Act of 1965 (HEA) as amended, allows schools to make Federal Perkins Loans to

certain students for up to five additional years (through 9/30/20) to enable students who received loans for awards years that end before 9/30/15 “to continue or complete courses of study.” A school can make a new loan to a student after 9/30/15 if all of the following conditions are met: The school made at least one loan disbursement to the student on or before 6/30/15; The student is enrolled at the same school where the last loan disbursement was received; The student is enrolled in the same academic program for which the student received his or her last loan

disbursement; and The school has awarded the student his or her entire Direct Subsidized Loan eligibility.

A student who receives his or her first Federal Perkins Loan for the 2015–16 award year does not meet the grandfathering criteria to receive a loan beyond the 2015–16 award year.

The Department of Education (ED) considers a student to be enrolled in the same academic program only if the first four digits of the program’s Classification of Instructional Program (CIP) code are identical to the first four digits of the CIP code for the program for which the student received his or her last Perkins Loan disbursement.


Use of Funds A school may use Federal Perkins Loan Program funds to: Make loans to students; Transfer up to 25% of its FCC for an award year to FSEOG and/or FWS; Pay administrative expenses; Pay certain billing and collection costs; and Pay litigation expenses.

Student Eligibility A student must: Meet Title IV general student eligibility criteria; Demonstrate financial need (the school must give priority to students with exceptional financial need, as

defined by the school for the purpose of awarding funds); Be enrolled or accepted for enrollment as an undergraduate, graduate, or professional degree-seeking

student (there is no minimum enrollment requirement); Demonstrate a willingness to repay a loan; and Meet certain requirements if the student has had a prior Title IV loan or Teacher Education Assistance

for College and Higher Education (TEACH) Grant service obligation discharged due to total and permanent disability.

If a student applied for a total and permanent disability discharge of a Title IV loan or TEACH Grant service obligation on or after 7/1/10, the student must: Provide a physician’s written certification that he or she is able to engage in substantial gainful activity; Sign a statement acknowledging any new Title IV loan cannot be discharged due to any present

impairment unless that condition substantially deteriorates; and Resume repayment of the Title IV loan or acknowledge he or she is subject to the TEACH Grant

service obligation if the new Perkins Loan is within three years of the discharge. If a student applied for a total and permanent disability discharge before 7/1/10 and the Title IV loan or

TEACH Grant service obligation is in the three-year conditional discharge period, the student must: Provide a physician’s written certification that he or she is able to engage in substantial gainful activity;

and Sign a statement acknowledging:

Any new Title IV loan or TEACH Grant service obligation cannot be discharged due to any present impairment unless that condition substantially deteriorates, and

Collection activity will resume on the conditionally discharged loan. If a student’s prior Title IV loan was in default at the time it was conditionally discharged, the student is

ineligible for Title IV aid unless the student repays the defaulted loan or makes satisfactory repayment arrangements.

Award Amounts Annual loan limits are: $5,500 for an undergraduate student; and $8,000 for a graduate or professional degree student.


Aggregate loan limits are: $11,000 for a student in the first or second year of an undergraduate program; $27,500 for a student in the third or fourth year of an undergraduate program; and $60,000 for a graduate or professional degree student (including amounts borrowed as an

undergraduate). Annual and aggregate loan limits may be exceeded by as much as 20% for students engaged in an

approved study abroad program. Federal Perkins Loan Master Promissory Note A school must use the ED-approved Federal Perkins Loan Master Promissory Note (Perkins MPN) and

may not make any change to the prescribed MPN language except to include: The school’s name, address, and telephone number in the School Section; The bracketed minimum repayment text if the school chooses to exercise this option; and A reference in the lower margin of the note as to whether the document is the original, student copy, or

file copy. A school may choose to use the paper Perkins MPN or the electronic version (Perkins eMPN). A student may choose to sign a paper MPN rather than the eMPN. A school may choose to use the MPN as single-award year promissory note or as multi-award year

promissory note (unless the student requests the single-year option). The MPN expires on the earliest of: 10 years from date the borrower signed the MPN; Within 12 months of the date the borrower signed the MPN if no disbursement of a loan is made under

that MPN; or The date the school receives the borrower’s written request that the MPN no longer be used as basis

for additional loans.

Pre-Disbursement Disclosures A school must provide certain loan information to the borrower: Prior to making the first disbursement of Federal Perkins Loan for an award year; and In writing as part of the school’s application materials, the promissory note, or on a separate form.

The required disclosures include: The school’s name and address to which communications and payments should be sent; The principal loan amount; A statement that the school will report the loan amount to a national credit bureau at least annually; The stated interest rate on the loan; Yearly and cumulative maximums that may be borrowed; An explanation of when loan repayment begins and when the borrower must pay accruing interest; Minimum and maximum repayment terms; The required minimum monthly payment amount; The total cumulative balance owed and the estimate of monthly repayment amount needed to repay

that balance; Special options for loan consolidation or refinancing; The right to prepay all or part of loan at any time without penalty;


A summary of available deferment and cancellation options, including a brief notice of the Department of Defense loan repayment program for specific military service;

The definition of default and the consequences of default, including a statement that the school may report the borrower’s default to a national credit bureau;

The effect of accepting the loan on the borrower’s eligibility for other student aid; Collection costs that may be assessed the borrower, including late charges, collection fees, and

litigation fees; and The amount of any charges:

Collected by school at, or prior to, disbursement, Deducted from the loan proceeds, and Paid separately by the borrower.

Exit Counseling A school must conduct exit counseling with the borrower shortly before the borrower ceases at least half-

time enrollment. Exit counseling may be conducted: In-person, by audiovisual presentation, or by interactive electronic means; and By the school or a designated third-party servicer.

If exit counseling is conducted through interactive electronic means, the school must take reasonable steps to ensure each borrower receives the counseling materials and participates in and completes the counseling.

If a borrower leaves school without the school’s knowledge or fails to complete exit counseling, the school must provide the counseling by electronic means or by mailing written materials to the borrower’s last known address. The school must mail the exit counseling materials or provide the exit counseling through electronic

means within 30 days of learning that a borrower has left the school or has failed to complete exit counseling.

If the student is enrolled in study abroad or a correspondence program and the school chooses to provide the borrower written exit counseling materials, the school must mail the materials within 30 days after the borrower completes the program.

Exit counseling must: Inform the borrower of the average anticipated monthly repayment amount based on his or her actual

indebtedness or the average indebtedness of borrowers in the same academic program; Explain options to prepay each loan and pay each loan on a shorter schedule; Review the option to consolidate a Federal Perkins Loan, including the consequences of consolidating

a Federal Perkins Loan; Include debt management strategies designed to facilitate repayment; Explain the use of a Master Promissory Note; Emphasize the seriousness and importance of the repayment obligation the borrower is assuming; Describe the likely consequences of default, including adverse credit reports, delinquent debt collection

procedures under federal law, and litigation; Provide a general description of the terms and conditions under which a borrower may obtain full or

partial cancellation of principal and interest, defer repayment of principal or interest, or be granted an extension of the repayment period or a forbearance on a Title IV loan;


Provide a paper or electronic copy of the information ED makes available pursuant to Section 485(d) of the Higher Education Act of 1965 (HEA), as amended;

Review information on availability of ED’s Office of the Federal Student Loan Ombudsman; Inform the borrower of the availability of Title IV loan information in the National Student Loan Data

System (NSLDS); Provide a general description of the types of tax benefits that may be available to borrowers; and Emphasize the borrower’s obligation to repay the full amount of the loan even if the borrower:

Has not completed his or her program, Has not completed the program within the regular time for program completion, Is unable to obtain employment upon completion, or Is otherwise dissatisfied with (or did not receive) educational or other services purchased from the

school. When reviewing the option to consolidate a Federal Perkins Loan during exit counseling, the school must

include information about the: Effects of consolidation on the total interest to be paid, fees to be paid, and the length of repayment; Effects of consolidation on a borrower’s underlying loan benefits, including grace periods, loan

forgiveness, cancellation, and deferment opportunities; Options to prepay the loan or to change repayment plans; and Borrower benefits that may vary among different lenders.

During the exit counseling, the school must collect: The borrower’s current and expected permanent address, Social Security Number, references, and (if

applicable) driver’s license number; and The name and address of the borrower’s:

Next of kin, and Expected employer (if available).

A school must document, for each borrower, its compliance with the exit counseling requirements. Repayment Disclosures A school must provide a written disclosure of repayment information to each borrower shortly before the

borrower ceases at least half-time enrollment, during exit counseling, or immediately after discovering the borrower has entered the repayment period.

The written repayment disclosure must include: The name and address of the:

School to which debt is owed, Official or servicing agent to whom communications should be sent, and Party to whom payments should be sent;

The estimated loan balance owed on the date the repayment period is scheduled to begin; The loan’s stated interest rate; The repayment schedule for all loans covered by the disclosure, including the:

Due date of the first payment, and Number, amount, and frequency of required payments;

An explanation of any special options for loan consolidation or refinancing;


A statement that the borrower has the right to prepay all or part of the loan at any time without penalty; A description of the charges imposed for the borrower’s failure to pay all or part of loan installment

when due; A description of any charges that may be imposed due to default (e.g., collection costs); The total amount of interest the borrower will pay per the projected repayment schedule, Contact information of the party who, upon the borrower’s request, will provide a copy of the borrower’s

signed promissory note; and A statement that, if the borrower is required to make minimum monthly payments and has loans from

more than one school, the borrower must notify the school if he or she wants the minimum monthly determination to be based on payments due to other school(s).

Repayment The maximum repayment period is 10 years, and excludes authorized periods of deferment and

forbearance. A school may require the borrower to make payments on a monthly, bimonthly, or quarterly basis. At the school’s option, the school may require a minimum monthly repayment amount of: $40; or $30 if the borrower has an outstanding balance on a loan made prior to 10/1/92 that included the $30

minimum repayment provision. Under no circumstances may a school require a minimum monthly payment of more than $40. Grace Period A borrower is entitled to an initial grace period (i.e., the interval that immediately follows a period of

enrollment and precedes the date on which the first required repayment on a loan) before repayment begins. If the loan is a Federal Perkins Loan, the initial grace period is 9 months. If the loan is an NDSL, the initial grace period is 6 months. If the borrower resumes at least half-time enrollment before the initial grace period has elapsed, the

borrower is entitled to a new, full initial grace period. If the borrower is enrolled less than half time and has an outstanding loan, the borrower must begin

repayment on a new loan on the date of the next scheduled payment of the outstanding loan. If the borrower has no outstanding loan, the repayment period is the earlier of:

Nine months from the date the loan was made; or The end of a nine-month period that began on the date the borrower ceased to be enrolled as at

least a half-time regular student and includes the date the loan was made. If a borrower is a member of the U.S. Armed Forces Reserve, the initial grace period excludes any period

up to 3 years (including the time necessary to resume studies at the next available enrollment period) during which the borrower is called or ordered to active duty for more than 30 days. Upon completion of the excluded period, the borrower is entitled to a new initial grace period. The same exclusion and entitlement to a new initial grace period applies to affected individuals under

Higher Education Relief Opportunities for Students (HEROES) Act of 2003. An affected individual with respect to Federal Perkins Loan repayment are persons who: 1) are

serving on active duty during a war, other military operation, or national emergency; 2) are performing qualifying National Guard duty during a war, other military operation, or national emergency; or 3) reside or are employed in designated disaster area in connection with a national emergency.


A borrower is entitled to a six-month post-deferment grace period following each period of deferment during which no payments are due and no interest will accrue.

A borrower may waive a portion or all of the grace period and resume payment earlier.

Deferment Deferments are available for all loans made on or after 7/1/93 if the borrower is: Enrolled at least half time as regular student at an eligible institution; Enrolled in an eligible graduate fellowship program; Engaged in graduate or post-graduate fellowship-supported study outside the U.S.; Enrolled in an ED-approved rehabilitation training program for individuals with disabilities; Engaged in service that qualifies for cancellation of the loan; Seeking but unable to find full-time employment; Suffering an economic hardship as defined in regulations (which may include service as a Peace Corps

volunteer); Serving on active duty in the U.S. Armed Forces or performing qualifying National Guard duty during a

war or other military operation or national emergency; or In a post-active duty period if, under conditions specified in the regulations, the borrower was enrolled

in a postsecondary school at the time of, or within six months prior to, the borrower’s activation. The following definitions apply to military deferments: Serving on active duty during a war or other military operation or national emergency: Is service by an

individual who is: A Reservist of an Armed Force ordered to active duty under section 12301(a), 12301(g), 12302,

12304, or 12306 of Title 10 United States Code (USC); A retired member of an Armed Force ordered to active duty under section 688 of such title, for

service in connection with a war or other military operation or national emergency, regardless of the location at which such active duty service is performed; or

Any other member of an Armed Force on active duty in connection with emergency or subsequent actions or conditions who has been assigned to a duty state at a location other than the location at which the member is normally assigned.

Qualifying National Guard duty during a war or other operation or national emergency: Is service as a member of the National Guard on full-time National Guard duty, as defined in section 101(d)(5) Title 10 USC, under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under 32 U.S.C. 502(f) in connection with: A war; Other military operation; or National emergency declared by the President and supported by federal funds.

Active duty: As defined in section 101(d)(1) of Title 10 USC, except that such term does not include active duty for training or attendance at a service school.

Military operation: A contingency operation as defined in section 101(a)(13) of Title 10 USC. National Emergency: National emergencies declared by the President by reason of certain terrorist

attacks (including that declared on 9/14/01). Except for an in-school deferment or when the borrower is performing service that will qualify the borrower

for loan cancellation, the:


Borrower (or the borrower’s representative for a military deferment) must request deferment and provide supporting documentation required by school before the school’s deadline; and

School must: Grant the deferment if the deferment conditions are met, Confirm (except for service as a Peace Corps volunteer) the borrower’s continued eligibility for the

deferment at least annually, and Notify the borrower (and the borrower’s representative for a military deferment) it granted the

deferment and of the borrower’s option to cancel the deferment and continue payments. If a deferment is granted because the borrower is unable to find full-time employment or for economic

hardship (other than for service in the Peace Corps), the deferment cannot exceed three years. For an economic hardship deferment for volunteer service in the Peace Corps, the deferment is the

lesser of the borrower’s full term of Peace Corps service or three years. For an in-school deferment, the school: May grant the deferment automatically based on enrollment records; and Must notify the borrower of the option to cancel the deferment and continue payments.

If borrower is an affected individual under the HEROES Act who left school while in an in-school or graduate fellowship deferment, the school must maintain the loan status for up to three years, including time necessary for the borrower to resume at least half-time enrollment in the next regular enrollment period.

Loans made prior to 7/1/93 may have additional deferments depending on when the loan was borrowed and promissory note terms.

Forbearance Forbearance may be granted in the form of a temporary cessation of payment, an extension of the time for

making payments, or a reduction in the payment amount. A school may grant forbearance of principal and interest unless borrower requests to pay interest that

accrues during the forbearance period. The school must grant forbearance upon receipt of an oral or written request and receipt of supporting

documentation demonstrating the borrower meets one or more forbearance criteria. The school and the borrower must agree to the forbearance terms. The school must confirm terms of forbearance agreement in a written notice to the borrower and record

the notice terms in borrower’s file. The school must grant forbearance if: The borrower’s monthly repayment obligation on all Title IV loans is equal to or greater than 20% of

total monthly gross income; The school determines poor health or other acceptable reasons qualify borrower; or ED authorizes period of forbearance due to national military mobilization or other national emergency.

Unless the borrower is an affected individual under the HEROES Act, forbearance is granted for no more than 12 months and is renewable for periods that collectively do not exceed 3 years. If the borrower is an affected individual under the HEROES Act:

Forbearance for an initial 12-month period may be granted on a request from the borrower, a member of borrower’s family, or other reliable source;

Beyond the 12-month initial period, the school annually must require supporting documentation from the borrower, borrower’s family member, or other reliable source; and


After the borrower no longer is an affected individual, the school must grant forbearance without supporting documentation for a 3-month transition period that immediately follows the last 12-month period for which it granted forbearance.

If the borrower is in repayment and is unable to make payments due to a federally-declared disaster, the: School must grant forbearance for up to 3 months without supporting documentation based on the

borrower’s request; Borrower must request and provide supporting documentation if the borrower wants an extension

beyond three-month period; and School, before granting an extension, must examine the borrower’s eligibility for an economic hardship

or unemployment deferment. Cancellation All or portion of Federal Perkins Loan canceled for borrowers who perform certain services. Cancellation of a percentage (specified in regulation) of a borrower’s outstanding balance for each year of

qualifying service for: Active duty military service in an area of hostilities or imminent danger; Volunteer service under Peace Corps Act or Domestic Volunteer Service Act of 1973; Full-time teaching in:

Certain schools or education service agencies serving low-income families, The field of special education, or Certain fields in states which have teacher shortages in those fields;

Full-time employment as a nurse or medical technician; Certain full-time employment in a public or private nonprofit child or family service agency; Full-time employment as a qualified professional provider of certain early intervention services; Full-time employment as a firefighter to a local, state, or federal fire department or fire district; Full-time employment as a faculty member at a tribal college or university; Certain full-time employment as a librarian with a master’s degree; Certain full-time employment as a speech pathologist with a master’s degree; Certain full-time employment as a law enforcement or corrections officer or as a public or community

defender attorney; and Full-time employment in certain early childhood education programs.

To apply for cancellation, a borrower must submit a written request and supporting documentation to the school which holds the loan or loans. The school has responsibility to determine whether or not the borrower meets the criteria for

cancellation. For all types of qualifying service, except volunteer service, borrowers can have up to 100 percent of the

Federal Perkins Loan debt cancelled. Borrowers who qualify for a volunteer service cancellation may have up to 70 percent of their loan debt

cancelled. The longer a borrower performs qualifying service, the higher the cancellation rate. Annual cancellation

rates for: Military service, teachers, and public servants range from 15 to 30 percent; Volunteer services range from 15 to 20 percent; and Early childhood education is 15 percent.


Discharge A loan may be discharged due to the borrower’s death or total and permanent disability. A discharge based on the death of the borrower must be based on: An original or certified copy of the death certificate; An accurate and complete photocopy of the original or certified copy of the death certificate; or In exceptional circumstances, other reliable documentation supporting the discharge request as

approved by the school’s chief financial officer. In the case of a discharge based on the borrower’s total and permanent disability, the borrower must

submit the discharge request application to ED. Total and permanent disability is defined as the condition of an individual who is unable to engage in

any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of at least 60 months.

If the discharge request is for a veteran with a military service related disability, the application must include documentation from the Department of Veterans Affairs (VA) showing the borrower is unemployable due to a service-connected disability.

For all other total and permanent disability discharge requests, the application must contain either a: Certification by a doctor of medicine or osteopathy, legally authorized to practice in a state, that the

borrower meets the regulatory definition of totally and permanently disabled and certification must be submitted within 90 days of the physician’s certification; or

Social Security Administration (SSA) notice of award for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) benefits indicating that the borrower’s next scheduled disability review will be within five to seven years.

ED will reinstate a borrower’s obligation to repay a loan discharged based on total and permanent disability other than for a military service related disability if, within 3 years of the discharge, the borrower: Has annual earnings from employment that exceed 100 percent of the poverty line for a family of 2; Receives a new TEACH Grant or a new Title IV loan (other than a Consolidation Loan containing loans

that were not discharged); Fails to return, within 120 days of the disbursement date, the full amount of any TEACH Grant or Title

IV loan received during the 3-year period; or Receives a notice from the SSA indicating that he or she is no longer disabled or that the continuing

disability review will no longer be the 5 to 7 year period indicated in the SSA notice of award for SSDI or SSI benefits.

Default Failure to repay a Federal Perkins Loan according to the terms and conditions of the promissory note can

result in the loan’s default. The consequences of default include the: Loss of eligibility for federal financial aid; Loss of the loan’s deferment and cancellation benefits; and Notification of the loan’s default status to national credit bureaus.


Rehabilitation Each school participating in the Federal Perkins Loan Program must: Establish a program for rehabilitating defaulted Federal Perkins Loans; and Notify defaulted borrowers of the option to rehabilitate defaulted loans and the consequences of doing

so. Rehabilitation: Returns a defaulted loan to a regular repayment status; Restores the borrower’s Title IV eligibility; Restores the benefits of the promissory note, including deferment and cancellation benefits; Removes the default status from borrower’s credit history; and May be used only one time by the borrower.

To rehabilitate a Federal Perkins Loan, the borrower must: Request rehabilitation orally or in writing; and Voluntarily make 9 consecutive on-time monthly payments.

An on-time payment is one that is made within 20 days of the payment due date. Payments missed while the borrower is an affected individual under the HEROES Act are not

treated as an interruption in the number of consecutive on-time payments required for rehabilitation. If the loan is rehabilitated, the first payment under the 9 consecutive monthly payments is treated as the

first payment under a new 10-year maximum repayment schedule.


References for Campus-Based Programs The following is a list of resources used to develop these materials that you may find helpful if you need additional information or clarification on a topic covered in this training module.

Law The Higher Education Act of 1965, as amended: Part A – Grants to Students in Attendance at Institutions of Higher Education Subpart 3 – Federal Supplemental Opportunity Grants

Part C – Federal Work-Study Programs Part E – Federal Perkins Loans

Regulations 34 CFR 673 – General Provisions for the Federal Perkins Loan Program, Federal Work-Study Program, and Federal Supplemental Educational Opportunity Grant Program 34 CFR 674 – Federal Perkins Loan Program 34 CFR 675 – Federal Work-Study Programs 34 CFR 676 – Federal Supplemental Educational Opportunity Grant Program

Federal Registers Federal Register, 1/12/15, pp. 1495 to 1498 – Federal Perkins Loan, Federal Work-Study, and Federal Supplemental Educational Opportunity Grant Programs; 2015–2016 Award Year Deadline Dates; Notice Federal Register, 11/3/14, pp. 65197 to 65200 – Applications for Eligibility Designation; Programs Under Parts A and F of Title III of the Higher Education Act of 1965, as amended (HEA), and Programs Under Title V of the HEA; Notice Federal Register, 11/1/13, pp. 65768 to 65842 – Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule Federal Register, 7/29/13, pp. 45618 to 45728 – Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Proposed Rule Federal Register, 11/1/12, pp. 66090 to 66098 – Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule Federal Register, 9/27/12, pp. 59311 to 59318 – Federal Student Aid Programs (Student Assistance General Provisions, Federal Perkins Loan Program, Federal Direct Loan Program, Federal Family Education Loan Program); Notice The HEROES Act – Updated Waivers and Modifications of Statutory and Regulatory Provisions Governing the FSA Programs


Federal Register, 7/17/12, pp. 42090 to 42098 – Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Proposed Rule Federal Register, 10/23/08, pp. 63234 to 63236 – Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Final Rule Federal Register, 7/1/08, pp. 37696 to 37698 – Federal Perkins Loan Program, Federal Family Education Loan Program, and William D. Ford Federal Direct Loan Program; Proposed Rule Federal Register, 12/21/04, pp. 76404 to 76411 – Student FICA Exception; Final Regulation Federal Register, 10/28/99, p. 58290 – Student Assistance General Provisions; General Provisions for the Federal Perkins Loan Program, Federal Work-Study Program, and Federal Supplemental Educational Opportunity Grant Program; Federal Perkins Loan Program; Federal Work-Study Programs; Federal Supplemental Educational Opportunity Grant Program; and Federal Pell Grant Program; Final Rule Dear Colleague Letters GEN-15-03 – Wind-Down of the Federal Perkins Loan Program GEN-12-23 – Electronic Version of the Revised Perkins Loan Master Promissory Note GEN-12-19 – Approval of Federal Perkins Loan Master Promissory Note GEN-10-16 – Guidance for Helping Title IV Participants Affected by a Major Disaster

Electronic Announcements Electronic Announcement, 3/27/15 – 2015–16 Federal Work-Study Program Community Service Waiver Requests Electronic Announcement, 2/2/15 – Participation in and Reporting Expenditures for the Work Colleges Program Electronic Announcement, 1/7/15 – Reminder – Deadline for 2014–15 Underuse Penalty Waiver for the Campus-Based Programs is February 9, 2015

The Blue Book, 2013 Volume 7 – The Business Office and the Campus-Based Programs 2014–15 FSA Handbook Volume 1 – Student Eligibility Volume 3 – Calculating Awards and Packaging Volume 6 – Managing Campus-Based Programs

Module 7Campus-Based Programs

National Association of Student Financial Aid Administrators Presents …

© 2015 NASFAA

Module 7


Slide 7-2 © 2015 NASFAA


The campus-based programs:

• Federal Supplemental Educational Opportunity Grant Program (FSEOG)

• Federal Work-Study Program (FWS)

• Federal Perkins Loan Program


School Participation in Campus-Based Programs• Must be approved to participate

• Annually must complete Fiscal Operations Report and Application to Participate (FISAP) to:

– Apply for funds for next award year

– Report previous award year expenditures

Dakotadtp

Text Box




Campus-Based Programs Common Provisions• Matching requirement• Transfer of funds between programs• Carry-forward and carry-back options• Use of funds for independent students and

part-time students• Administrative Cost Allowance (ACA)• Underutilization of funds penalty


FSEOG Program

Program-specific requirements:

• Student eligibility

• Minimum and maximum award amounts

• Selection groups criteria


FWS Program

Program-specific requirements:• Student eligibility

• Award amounts

• Use of funds

• Eligible employment

• Payments to students

• Community service

Dakotadtp

Text Box




Federal Work-Study Program

• At least 7 percent of FWS allocation to compensate students employed in community service positions

• If school does not meet community service expenditure requirements, it must return FWS funds to ED

– Amount returned is difference between what school should have spent and amount actually spent for community service



ED may waive one or both community service expenditure requirements if school:

• Requests a waiver

• Demonstrates meeting requirement would cause undue hardship to its students


Community service positions:• Services designed to improve the quality of life

for community residents, particularly low-income individuals, or to solve particular problems related to their needs

• Except for support services offered by the school to its students with disabilities, all on-campus positions must be for services that are open and accessible to the community


Dakotadtp

Text Box




Federal Perkins Loan Program

• Priority in awarding to students who meet exceptional financial need, as defined by institution

• To receive a Federal Perkins Loan, student must demonstrate a willingness to repay the loan

• Delinquency or default on a previous student loan indicates student is unwilling to repay new loan



• School may choose to use either paper Federal Perkins Loan Master Promissory Note (Perkins MPN) or electronic version of the note (eMPN)

• Student may choose to use the MPN as either a single or multiple award year note, if school offers multiple year MPN

• Student may also choose to sign paper MPN if school uses eMPN



School must provide certain loan information called pre-disbursement disclosures before making the first disbursement of a loan for an award year

Dakotadtp

Text Box





Exit counseling is required before a borrower ceases at least half-time attendance



Loan repayment benefits:

• Grace period

• Deferment

• Forbearance

• Cancellation

• Discharge



• Failure to repay can result in default

• A borrower may rehabilitate a defaulted loan only once

Dakotadtp

Text Box




Dakotadtp

Text Box


1101 CONNECTICUT AVENUE NW, SUITE 1100WASHINGTON, DC 20036-4303

202.785.0453 FAX. 202.785.1487 WWW.NASFAA.ORG

The National Association of Student Financial Aid Administrators (NASFAA)

provides professionaldevelopment for financial

aid administrators; advocates for public policies that increase

student access and success;serves as a forum on student financial aid issues, and is

committed to diversitythroughout all activities.

© 2015 National Association of Student Financial Aid Administrators

.

core module 7 - campus-based funds - participant's handout

Documents