Federal Updates

Closed school corner

The following table provides a list of newly reported school closures and error corrections from the Postsecondary Educational Participants System (PEPS) and from the January 2008 Closed School Monthly Report supplied by the Department of Education.

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Ringing in the new year with Neg Reg

In Shoptalk Online edition 428, TG announced that ED had recently published a Federal Register notice stating that it would be conducting negotiated rulemaking (a.k.a. Neg Reg) beginning this January. ED subsequently held three regional hearings — at one of which TG provided testimony — to gather public input regarding federal regulatory issues, which would be considered for inclusion in negotiated rulemaking.

As announced in the January 8 Federal Register (available at http://a257.g.akamaitech.net/7/257/2422/01jan20081800/edocket.access.gpo.gov/2008/pdf/E8-121.pdf), ED has decided to establish two negotiating committees, or "teams." The first committee will develop proposed regulations for the Teacher Education Assistance for College and Higher Education (TEACH) Grant program, and the second will consider various student loan issues.

Neg Reg in a nutshell
Neg Reg is a process used by many federal agencies to develop and revise regulations. In Neg Reg sessions affecting financial aid regulations, a group of participants representing various sectors of the financial aid community meet with ED representatives to reach consensus on the language of a proposed rule. ED may use that language as a basis for its proposed rule, which will be published, along with a request for public comments, following the conclusion of the Neg Reg sessions.

Student loan issues
Although TG will not be serving as a negotiator in this Neg Reg, TG will attend the sessions and provide active support to the negotiators representing the FFELP.

The proposed issues on the 2007-08 Neg Reg agenda for the student loan issues team are as follows:

• Income-based repayment plan (IBR)
• Conforming the economic hardship deferment with IBR
• Public service loan forgiveness
• Definition of not-for-profit holder
• Harmonizing HEROES waivers with other benefits provided to returning and active duty military
• Federal preemption of state laws related to improper inducements and arrangements between schools, lenders and other entities in the student loan programs

TEACH grant issues
The topics the TEACH grant committee is likely to address include:

• Institutional eligibility
• Program eligibility
• Conversion of grant to loan
• Repayment
• Conforming changes

The lists of topics are tentative and topics may be added as the process continues.

First sessions
ED has set January 14 as the date that the first student loan issues Neg Reg session will begin — there will likely be three sessions total. The TEACH grant sessions will begin January 8 and will also likely comprise three sessions.

More information
Shoptalk Online will provide regular updates to keep you informed about the progress of Neg Reg. ED has established a 2007-08 Negotiated Rulemaking for Higher Education Web site at www.ed.gov/policy/highered/reg/hearulemaking/2008/index2008.html. The site currently includes the agendas and topics for both negotiating teams and will be updated with more information as Neg Reg proceeds.

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While you were out...

We hope the holidays brought some merriment to our customers, as well as some much-deserved rest and relaxation. While many of us were sipping eggnog and sharing time with family, ED and Congress were busy wrapping up some last-minute gifts for the financial aid community. Here's a quick recap of some of the events and announcements that have occurred since Shoptalk Online began its holiday hiatus; additional topics are covered in separate articles in this edition.

New question on the FAFSA
On December 21, ED announced that it has revised the 2008-09 Free Application for Federal Student Aid (FAFSA) to include a question designed to identify possible Teacher Education Assistance for College and Higher Education (TEACH) grant recipients. For the 2008-09 year, the new question will appear on the FAFSA on the Web, but not on the paper or PDF versions of the FAFSA. The TEACH grant, which will become effective for the 2008-2009 award year, was created by the College Cost Reduction and Access Act of 2007 (CCRAA), and will provide up to $4,000 a year in grant assistance to students who plan on becoming a teacher and who meet certain requirements. The new TEACH Grant Program question will read as follows:

"Are you planning on completing coursework now, or in the future, necessary for you to become an elementary or secondary school teacher? A 'YES' response will inform your school that you may be interested in a new Federal aid program for students who meet certain conditions and plan on becoming teachers."

More information about the revised FAFSA and ED's plans for processing FAFSAs for applicants who answer "yes" to the new question may be found on the Information for Financial Aid Professionals (IFAP) Web site at http://ifap.ed.gov/fregisters/FR12172007.html and at http://ifap.ed.gov/eannouncements/122107CCRAANewTEACHGrantQuestionAddedtoFOTW.html.

2008 appropriations and Pell grant amounts
After lengthy negotiation and repeated veto threats from the White House, Congress finally succeeded in approving an appropriations bills for FY 2008, which the president signed into law on December 26. HR 2764, or the Consolidated Appropriations Act, sets funding levels for all Title IV programs for the upcoming year. Of most immediate concern for many financial aid administrators are the amounts provided for the Pell Grant Program; the bill sets the maximum 2008-09 Pell grant award at $4,241, which is slightly less than the $4,310 appropriated maximum for 2007-08. However, because the CCRAA provided for a Pell grant increase of $490 for the 2008-2009 award year, the actual maximum Pell grant award for 2008-09 will be $4,731, an increase of $421 over 2007-08. ED has stated that it will be posting 2008-09 Pell grant payment and disbursement schedules on IFAP within the next several weeks.

2008-09 Application and Verification Guide
On December 28, ED published the first volume of the 2008-09 Federal Student Aid Handbook (FSA Handbook), the Application and Verification Guide (AVG). TG will make the AVG available on TG Online at www.tgslc.org/resources/fsa_handbook.cfm, and other volumes will be posted as they are released. Once all the volumes of the 2008-09 FSA Handbook have been released, TG will provide a single downloadable file encompassing all of the volumes. Watch future editions of Shoptalk Online for details. In the meantime, the AVG is available on the IFAP Web site at http://ifap.ed.gov/sfahandbooks/0809FSAHBKAppVerification.html.

College Access Challenge Grants Program application
The December 31 Federal Register announced the solicitation of comments on the proposed College Access Challenge Grants Program (CACGP) application. The CACGP, established by the CCRAA, will award funds to states for the administration of matching challenge grant projects intended to foster partnerships among federal, state, and local governments and philanthropic organizations, with the goal of increasing the number of low-income students who are prepared to enter and succeed in postsecondary education. Instructions for downloading the proposed application and for submitting comments, which are due by February 29, may be reviewed in the Federal Register notice, available at http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-25339.pdf.

Still in the pipeline
The industry is still awaiting additional guidance from ED on several topics, including details on implementation of the CCRAA the final rules released last November, as well as associated new and revised forms. As always, Shoptalk Online will keep you informed as soon as additional information is available.

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Dear Colleague Letter on not-for-profit holder status for special allowance payments

On December 28, ED released Dear Colleague Letter (DCL) FP-07-12, which provides guidance on the process that will be used to determine which entities meet the statutory definition of an eligible not-for-profit holder for purposes of receiving special allowance payments (SAP). The DCL reminds FFELP participants that because of changes made to the SAP rates by the CCRAA, new reporting codes must be used when submitting SAP billings for loans first disbursed on or after October 1, 2007. The DCL also states that entities wishing to receive a not-for-profit designation must submit to ED certain documentation and certifications in order to demonstrate that the entity meets the definition in HEA 435(p) of an eligible not-for-profit holder either in its own right, or through an eligible lender trustee.

More information
Detailed instructions for preparing and submitting the required documentation and certifications are included in the DCL, which may be accessed on IFAP at http://ifap.ed.gov/dpcletters/FP0712.html.

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Current special allowance rates: quarter ending December 31, 2007

The following rates apply for the quarter ending December 31, 2007:

• The average of the bond equivalent rates of the 91-day Treasury bills auctioned during the quarter ending December 31, 2007, is 3.59 percent.
• The average of the bond equivalent rates of the quotes of the three-month commercial paper (financial) rates in effect for each of the days in the quarter ending December 31, 2007, is 4.92 percent.

The FFELP special allowance rates for the most recent quarter are available on TG Online at www.tgslc.org/policy/index.cfm.

To learn more
For questions about special allowance rates, contact TG customer assistance at (800) 845-6267, or send an e-mail message to cust.assist@tgslc.org.

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