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C18 ISAC Update: State and Federal Financial Aid Issues
 

C18 ISAC Update: State and Federal Financial Aid Issues

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What’s the latest news about MAP grants (including the MAP 2+2 pilot program), Pell grants, student loans, and funding for these programs? This session will provide an overview of the changes to ...

What’s the latest news about MAP grants (including the MAP 2+2 pilot program), Pell grants, student loans, and funding for these programs? This session will provide an overview of the changes to state and federal financial aid programs for the 2012-13 school year, as well as provide updates on state and federal legislative, operational, and budgetary issues.

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    C18 ISAC Update: State and Federal Financial Aid Issues C18 ISAC Update: State and Federal Financial Aid Issues Presentation Transcript

    • Honoring the past – Embracing the future IACAC 2012 Conference ISAC Update: State and Federal Financial Aid Issues Presented by Sam Nelson and Sarah Wahab Ghazi
    • “Making college accessible and affordable for  Illinois students.” ‐ Mission StatementThe Illinois Student Assistance Commission (ISAC) is the financial aid agency in the state of Illinois that administers scholarship, grant, and prepaid tuition programs. CollegeIllinois.org
    • What We Know – Setting the Context• U.S. lags other countries in higher education  completion• Lifetime earnings are greater for those with more  education• Annual income increases with additional education• Unemployment during recessions is worst for those  with least education• By 2018, 54% of Illinois jobs will require associate’s  degree or more• Currently, 41% of Illinois residents age 25‐64 have an  associate’s degree or more
    • Percentage of Young-Adults(Age 25-34) with College Degrees U.S. ranks 10th among industrial nations (39%)
    • Students-in-Need Do Not Complete College % Of Students Who Complete Within  12 Years Of Graduating 8th  Grade By Income Quintile60% 52%50% 39%40%30% 24%20% 11%10% 0% Lowest 2nd Lowest Top 3 Overall Average Income QuintilesSource: Goldberger, Susan, “Doing the Math: What It Means to Double the Number of Low‐Income College Graduates,” Minding the Gap: Why Integrating High School with College Makes Sense and How to Do It, 2007.
    • Summary of the Problem Source “The Illinois Public Agenda for College and Career Success.” Illinois Board of Higher Education, 2004, p4.
    • National GoalPresident Obama has set the goal:“By 2020, America will once again have the highest proportion of college graduates in the world.”                          February 24, 2009Vice President Biden issues call to action to boost college graduation rates nationwide and releases College Completion Took Kit March 22, 2011
    • ISAC’s Big GoalHelp Illinois Increase to 60% the Proportion of Adults with a Postsecondary Credential by 2025Specifically, Help Illinois Increase to at Least 45% the Postsecondary Completion Rate of Low‐Income Students
    • ISAC’s Goal Is Consistent withMajor Foundation Goals• Lumina’s “Big Goal”• Gates Foundation Goal• Complete College America• Illinois P‐20 Council• Illinois Public Agenda for College and Career Success
    • ISAC Can Help IllinoisMeet College Attainment Goal• Improve high school to college transition• Support students in college or returning to college• Help families pay for college• Provide high quality, informed research• Build external support to foster systemic change• Align agency financial strategies and support  services with program goals
    • College Changes Everything Conference• Statewide college access and success conference• July 12, 2012 – save the date• Tinley Park Holiday Inn/Convention Center• More details and registration information to come
    • FAFSA Completion and MAP Update• Continue to encourage students to  complete the FAFSA• 2012 ‐ 13 Suspension date for MAP ‐ March 20, 2012• 2012 ‐ 13 MAP appropriation ~$387  million (Governor’s proposed  budget)• 2012 ‐ 13 MAP awards determined  after state budget is approved*Every dollar allocated to ISAC from state funds goes  t t d t i th f f t id
    • State Legislative Update• MAP 2+2• Illinois DREAM Commission• College Illinois Prepaid Tuition Program
    • ISACorpsFunded by U.S. Department of EducationFederal College Access Challenge Grant39 community college districtsMore than 80 “near peer” mentorsUp to 2 in each community college districtFrom a wide variety of backgrounds and experiences
    • The Corps in Action• During the 2010‐11 school year, Corps members, with your help,  reached about 156,000 people, provided one‐on‐one assistance to  almost 12,000 students, and had on‐going mentoring relationships  with almost 8,000 students.  • Between January and March of this year ISAC staff and Corps  members conducted 651 FAFSA completion workshops assisting  just under 10,000 students and their families. • The Corps will also be key to administering the Illinois College  Planning Act. This program provides early college planning for  students from families without prior college experience. Through  the plan they can receive ongoing structured college planning  assistance beginning in 8th grade and continuing through and  including postsecondary enrollment.
    • Consolidated Appropriations Act – 2012 See DCL GEN-12-01
    • 2012-2013 Pell Grant Amounts• 2012‐2013 Pell maximum award ‐ $5,550• 2012‐2013 Pell minimum award ‐ $550• Maximum Pell eligible EFC is 4995  • Was 5273 in 11‐12
    • Auto-Zero EFC Income Threshold• Reduces the income threshold for an automatic zero  expected family contribution (EFC) from $30,000 to  $23,000• For the 2012‐2013 award year was scheduled to be  $32,000• FAFSA on the Web and the Central Processing System  (CPS) have been updated, and both began 2012‐ 2013 FAFSA processing using $23,000 as the auto‐ zero EFC threshold
    • Ability-to-Benefit (ATB)• Eliminates Title IV eligibility for students without a high school diploma (or equivalent) • Exceptions for   • Home schooled students • Students who were enrolled in a Title IV  eligible program of study prior to July 1,  2012
    • Ability-to-Benefit (ATB)• Students who are or were, enrolled in a Title IV  eligible program anytime prior to July 1, 2012, may  continue to qualify under one of the ATB  alternatives – • Passing an independently administered,  approved ATB test • Successfully completing at least six credit hours  or 225 clock hours
    • Pell Grant Duration of Eligibility• Reduces the duration of a student’s eligibility to  receive Pell Grant from 18 semesters (or its  equivalent) to 12 semesters (or its equivalent)• Applies to all students effective with the 2012‐13  award year• Calculation includes all earlier years of the student’s  receipt of Pell
    • Pell Grant Duration of Eligibility• Calculate the equivalency by adding together each  of the annual percentages of a student’s scheduled  award that was actually disbursed to the student • LEU – Lifetime Eligibility Used • Once LEU reaches 600%, student no longer  eligible • If LEU more than 500% but less than 600%,  partial eligibility for next award year
    • Grace Period Interest Subsidy• Temporarily eliminates the interest subsidy on  Direct Subsidized Loans during the six month  grace period• Applies to new Direct Stafford Loans for which the  first disbursement is made on or after July 1,  2012, and before July 1, 2014
    • CCRAA of 2007 Interest Rate Reductions First disbursement of a loan: Interest rate on the  unpaid balance  Made on or after  And made before  July 1, 2008 July 1, 2009 6.0 percent July 1, 2009 July 1, 2010 5.6 percent July 1, 2010 July 1, 2011 4.5 percent July 1, 2011 July 1, 2012 3.4 percent
    • CCRAA of 2007 Interest Rate Reductions• Will sunset on June 30, 2012• All Stafford Loans, grad and undergrad, sub and  unsub, first disbursed on July 1, 2012 or later • WILL HAVE INTEREST RATE OF 6.8% • 6.8% WAS THE PRE‐CCRAA RATE• Requires change in law to prevent automatic  increase
    • President’s FY 13Proposed Budget
    • FY 13 Proposed Budget $5,635 maximum Pell Grant award for 2013‐2014  Maintain the subsidized loan interest rate for  undergraduate students at 3.4 percent for  undergraduates until July 1, 2013 Limit the duration of the Stafford Loan in‐school  interest subsidy to 150 percent of the normal time  required to complete the borrowers’ educational  program
    • FY 13 Proposed Budget Expand and improve the Perkins Loan program to  provide $8.5 billion in loans annually Provide $150 million in new funds for the Work‐ Study Program Reform and expand Federal allocations in the  campus‐based programs
    • Verification
    • Required Verification ItemsWhich elements must be verified?  1.  2. Number  3.  Food  Household  Enrolled in  Stamps  Size College (SNAP) 5. U.S.  6. Non‐ 4. Child  Income Tax  tax Filers  paid/Certain  Support  Untaxed  Income  paid Income &  From  Benefits Work Federal Student Aid (FSA) will give notice of data elements that must be verified.  Items will be listed on the Student Aid Report.  In addition, a school can choose to verify any other application items, requiring any necessary documentation, in accordance with consistently applied institutional policies. 
    • Verification WorksheetA school is not required to use ED’s verification worksheets.  It may use its own or none at all. 
    • Acceptable DocumentationHousehold Size Number Enrolled in  Food Stamps (SNAP)• Signed statement College • Documentation deemed  • Name & age of each  • Signed statement sufficient by the  household member • Name, age of students,  institution  • Relationship to  applicable institutions  • Ex: documentation from  applicant • Institutional statement providing agency  • Only if reason to believe  household members  attending elsewhere • Not needed if number in  college is one
    • Acceptable DocumentationChild Support paid U.S. Income Tax paid Non Tax‐Filers• Signed statement • IRS Data Retrieval  • W‐2s • Child’s name, amount  • Tax return transcript • Signed statement  and recipient’s name • W‐2s certifying:• Inaccurate information:  • Dependent status:  ‐ Individual has not filed  • Decree/custody order parents’ W‐2s and not required to file • Copies of child support  • Independent status:  ‐ Sources and amounts  checks or receipts  student’s W‐2 of income earned from  • Statement from support  • Extension filers work as reported on the  recipient FAFSA  • Copy of IRS Form 4868 • Amendments • Tax account        transcript
    • Acceptable Documentation for VerificationUpdate as of April 16th, 2012:In the limited set of cases where an aid applicant, who has filed a tax return and attempted unsuccessfully to use the IRS Data Retrieval Tool or to obtain IRS Tax Return transcripts, needs a timely alternative for meeting the 2012‐2013 verification requirements, institutions may, until July 15, 2012, use a signed copy of the relevant 2011 IRS Tax Return as acceptable verification documentation for the 2012‐13 award year.(GEN‐12‐07) 
    • Conflicting InformationA school must resolve all conflicting information before disbursing FSA funds, except when a student dies. Discrepant          Other Offices Subsequent ISIRs Tax DataEXAMPLES: Missing high Required to review subsequent Obligated to know:school diploma; Academic transactions for a student for the (1) who is required to fileProgress; Enrollment Status; entire processing year, even if (2) the correct filing statusetc… verification has been conducted (3) limits on who can be in an earlier transaction. claimed as an exemptionA school has an internal system to identify conflicting information that may affect a student’seligibility – regardless of the source and regardless of whether a student is selected forverification.
    • IRS Data Retrieval Tool
    • IRS Tax Return Transcript & IRS TaxAccount TranscriptBoth are free and can be requested online, via telephone or by mail.An IRS Tax Return Transcript is a typed copy of what was entered on an applicant’s original federal tax return. Most line items should be reflected –including IRS calculations and the final determination of the amount on each line item. An IRS Tax Account Transcript shows basic information from an applicant’s federal tax return including his or her marital status, return type, AGI, and taxable income. The IRS Tax Account Transcript also reflects any changes made after the initial filing of the tax return, including changes made by the IRS or the applicant, such as the filing of an amended tax return.  Applicants should receive the transcript within 5 to 10 calendar days after their request has been received.
    • Requesting an IRS Tax Return Transcript or IRS Tax Account Transcript Tax filers can request either a 2011 tax return transcript or a tax account transcript  from the IRS in one of three ways: Online Request • Available on the IRS Web site  at www.irs.gov Telephone Request  • Available from the IRS by  calling 1‐800‐908‐9946 Paper Request • Download IRS Form 4506T  at  http://www.irs.gov/pub/irs‐ pdf/f4506t.pdf • Mailed or faxed to: • RAIVS Team Stop 37106  Fresno, CA 93888 • (559) 456‐5876* Please note that tax transcripts are not the same as copies of tax returns.
    • Stay ConnectedISAC’s e‐Messaging Service• Notifies you when new  information and/or  announcements are added to  College Illinois• Summaries of new information,  along with links, will be sent to  your e‐mailGet Printed Materials• ISAC Printed Materials – www.collegeillinois.org• FSA Publications Ordering System (FSAPubs) – www.FSAPubs.org
    • Making college accessible and affordable for Illinois students. ‐ ISAC’s Mission StatementDeerfield1755 Lake Cook RoadDeerfield, IL 60015‐5209 ISACs Big Goal: Springfield500 W. Monroe, 3rd Floor Increase the proportion of Illinois Springfield, IL 62701‐1876 adults with a postsecondary ChicagoJames R. Thompson Center100 W. Randolph, Suite 3‐200 credential to 60 percent by 2025Chicago, IL 60601‐3219800.899.ISAC (4722)www.collegeillinois.org .................................................. College Illinois The official Web site of the Illinois Student  Assistance Commission (ISAC)