title iv boot camp

Title IV Boot Camp

Tony Glad

Global Education Management Services

ANZFAA 2010

2

Agenda Players and Terms

Institutional Requirements

Life of the Loan

Certification Basics

Disbursement Rules

Refund Requirements (R2T4)

Administrative Requirements

Resources

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Players

Borrower/Student/Parent

U.S. Congress

U.S. Department of Education (a.k.a. ED)

Institution (“I know, I know, you’re not a “school”)

Credit Bureau

Servicer

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Terms Title IV

Federal Family Education Loan Program (FFELP)*

William D. Ford Direct Loan Program

Stafford Loans/Direct Loans

Subsidized/Unsubsidized

PLUS/Graduate PLUS

Consolidation Loans

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Terms

Master Promissory Note (MPN)

Student Aid Report (SAR)

Institutional Student Information Report (ISIR)

Common Origination and Disbursement System (COD)

G5

Student Status Confirmation Report (SSCR)*

National Student Loan Data System (NSLDS)

Cohort Default Rate (CDR)

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Institution Responsibilities Meet and maintain loan program participation requirements

Determine borrower eligibility – initial and on-going Certify Loans

Receive and deliver loan funds

Counsel students (Entrance/Exit Interviews, SAP, Debt Management)

Report borrower enrolment information to NSLDS

Prevent and report fraud and abuse

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Life of the Loan

I. Origination: Student application, determination of eligibility, school certification, disbursement of funds, delivery of funds

II. Interim Period: In-School, Grace, Deferment, Forbearance

III. Repayment: Blatant plug to come to the Exit Interview presentation

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Certification BasicsIs the student eligible?

1. Is the student enrolled at least half-time?2. Is the student academically qualified?3. Is the student obtaining their degree from your

institution (not just semester abroad)?4. Is the student making Satisfactory Academic

Progress (SAP)?5. Is the student’s education program eligible?6. Have you received the student SAR or ISIR?

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Certification BasicsIs the student “dependent” or “independent”?

Undergraduate students are dependent unless: Married Have dependent children (providing more than 50% of support) Have other dependents Orphans or wards of the court at any time since age 14 Veterans of U.S. Armed Forces Over 24 years old by December 31 of award year Parents fail to qualify for a PLUS loan

Professional Judgment

All graduate and professional students are

independent.

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Certification BasicsAnnual Loan Amounts for Stafford

Dependent Undergraduate

1st YearSub: $3,500Sub & Unsub: $5,500

2nd YearSub: $4,500Sub & Unsub: $6,500

3rd year and beyondSub: $5,500Sub & Unsub: $7,500

Independent Undergraduate

1st YearSub: $3,500Sub & Unsub: $9,500

2nd YearSub: $4,500Sub & Unsub: $10,500

3rd year and beyondSub: $5,500Sub & Unsub: $12,500

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Certification BasicsAnnual Loan Amounts for Stafford

Graduate and Professional Students

Sub: $8,500

Sub & Unsub: $20,500

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Certification BasicsAggregate Loan Amounts for Stafford

Dependent Undergraduates Total Amount Cumulative $31,000 (maximum $23,000 subsidized)

Independent Undergraduates Total Amount Cumulative $57,500 (maximum $23,000 subsidized)

Graduate and Professional Students Total Amount Cumulative $138,500 (maximum $65,500 subsidized; includes Stafford Loans

received for undergraduate study)

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Certification Basics(Standard)Academic year

Annual loan limits based on academic rather than calendar year.

Generally less than 12 months, exceptions possible.

Can be institution–wide or program by program.

“Summer” terms are part of SAY, and may be a header or trailer.

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Certification BasicsCost of Attendance

COA includes:

Tuition and Fees

Books and Supplies (including personal computer)

Living expenses (room, board, misc. personal upkeep)

Transportation costs

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Certification BasicsExpected Family Contribution

Estimated by ED and supplied on SAR or ISIR

Based on student and (for dependents) parental assets

Can be adjusted by institution, but only by adjusting data items

9 month EFC is standard – must be prorated for longer or shorter periods

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Certification BasicsEstimated Financial Aid

EFA is the amount of “other” aid student will receive in the loan period. Can include:

Other need based loans

Grants, scholarships and bursaries

Work awarded based on enrolment

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Certification BasicsDetermining Loan Amounts

COA – EFC – EFA =“Need”.

“Need” = subsidized loan amount.

Remainder of annual loan limit can be awarded in unsubsidized loan.

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Certification BasicsDetermining Loan AmountsGraduate Student Example - Stafford

1. Sub Calculation 2. Unsub Calculation

COA = $30,000 COA/ Annual Limit = $20,500

-EFC = $25,000 - EFA (Sub) = $5,000

- EFA = $0

Sub = $5,000 Unsub = $15,500

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Certification BasicsDetermining Loan Amounts

PLUS = COA – EFA (including Stafford Loans)

No annual or aggregate limits

Amount cannot exceed Cost of Attendance or borrower requested amount

A parent can have multiple loans for multiple dependents in one year

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Certification BasicsProfessional Judgment

Institutions are allowed, on a case by case basis, to adjust:

The student’s Cost of Attendance

A data element used to calculate the EFC

A student’s dependency status

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Certification BasicsProfessional Judgment If using professional judgment (PJ), an institution

must follow these guidelines: PJ is issued on a case by case basis. Reason(s) for PJ must be documented in student’s file Institution may perform a dependency override from

dependent to independent, but not vice versa. A dependent student’s parental unwillingness to assist the

student is not by itself sufficient grounds for dependency override. **

PJ may NOT be used to waive student eligibility requirements or circumvent the intent of U.S. law and regulations.

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Certification BasicsNot done with that SAR/ISIR just yet…

Institution must also use the SAR/ISIR to confirm the student’s or borrower’s:

Citizenship status Valid Social Security number Selective Service registration (male) Student loan default status Drug violation

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Disbursement The institution must set a disbursement schedule

that ensures Title IV loans are disbursed in two or more installments, regardless of loan amount.

Disbursements should align with academic periods. (semester, trimester, quarter, etc.).

Single disbursement allowed for periods not more than one semester, trimester or quarter if the institution’s Cohort Default Rate is less than 10% for three most recent fiscal years. (15% in 2012)

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Disbursement

For Stafford/PLUS earliest date of first disbursement (draw down from G5) is 13 days prior to the first day of the first payment period.***

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Disbursement

Delayed Delivery: If an institution’s Cohort

Default Rate is more than 10% (15% in 2012)for three most recent fiscal years, then for first-year undergraduate, first time-borrowers earliest date of first disbursement is the 28th day of the first payment period. ***

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Disbursement Disbursements may be combined if the first disbursement

would occur on or after the date of the second or subsequent disbursements.

No disbursements more than 180 days after the end of the loan period. Loan must be certified before end of loan period.

Remember: Disbursement is the date funds are drawn down from G5 by the institution, not necessarily delivered to student.

Stafford and PLUS disbursements made directly to institution. Parent borrowers may request PLUS funds be mailed to them by institution.

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If a student withdraws prior to completing the period of enrolment, the institution must calculate a return to Title IV (R2T4).

Must be done whether or not student has paid institution.

If student completed 60% of the loan period, they earned the full loan amount.

If student completed less than 60%, institution must return unearned portion of loan attributed to institutional charges. Again, even if student didn’t pay.

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Funds must be returned within 45 days of:

1. Date student withdraws.

2. Date student notified institution of withdrawal.

3. Date the institution (anyone at institution) became aware that student withdrew or dropped out.

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Percentage of loan earned is percentage of the loan period attended (calendar days).

Example Loan Period = 100 days Borrower completed 50 days School must return 50% of institutional

charges paid with by loans.

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Staffing

Institution must provide adequate staffing

Minimum of two1. One to Certify (via COD)2. One to Receive and Deliver Funds (via G5)

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Student Status Confirmation Reports (SSCR):

Sent bi-annually by Guarantee Agencies

Confirms student enrolment status

Institution reviews, updates and returns within 30 days

Information can also be captured via NSLDS or National Student Loan Clearinghouse (http://www.studentclearinghouse.org)

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Entrance/Exit Counseling

First time borrowers must receive Entrance Interview before institution releases funds.

All students must receive Exit Interviews, even those who withdraw early and/or have had it before.

May be done in-person, in seminars, or on-line at www.studnetloans.gov or www.mapping-your-future.org.

http://www.studnetloans.gov/

http://www.mapping-your-future.org/

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Record Retention

In general, required records must be retained for a minimum of three years. However, the starting point for the three-year period is not the same for all records.

FFELP borrower eligibility and participation records must be kept for three years from the end of the award year in which the student last attended.

All other FFEL records, including reports or forms, must be kept for three years from the end of the award year in which the report or form was submitted.

Note: All materials relate to ongoing audits must be kept regardless of time elapsed.

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Record Retention

Any document that contains a signature, seal, etc. required to validate its authenticity must be maintained in its original hard copy or in an imaged format.

The electronic Institutional Student Information Record (ISIR) must be retained in the format in which it was received from ED by the school. However, the paper Student Aid Report (SAR) may be maintained in its original form or in an imaged media format.

Institution must allow access to ED, independent auditors, Comptroller General of the U.S. and Guarantee Agencies.

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Written Policies and Disclosures

Institution must make available to students:

Cost of attendance Academic Programs Withdrawal policies, including R2T4 Definition of Satisfactory Academic Progress (SAP), the

consequences of not meeting SAP, and appeal procedures Accrediting/licensing agencies that approve the institution

and its programs Special facilities and services for disabled students List continues to grow

IFAP Foreign Schools Pagehttp://ifap.ed.gov/ForeignSchoolInfo/ForeignSchoolInfo.html

Direct Loans School Guidehttp://www2.ed.gov/offices/OSFAP/DirectLoan/pubs/schoolguide.html

ED Foreign Schools Team: [email protected]

ED Student Pagehttps://studentloans.gov/myDirectLoan/index.action

Tara Felton: [email protected] Glad: [email protected]

Resources

http://ifap.ed.gov/ForeignSchoolInfo/ForeignSchoolInfo.html

mailto:[email protected]

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