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Shoptalk Online Contents

Federal Updates

Shoptalk Online 469, August 26, 2008

Federal Updates

Reauthorization: Grant programs

In previous editions of Shoptalk Online, we examined some of the FFELP-related provisions included in the Higher Education Opportunity Act (HEOA), the legislation that amends and extends the Higher Education Act (HEA). We again encourage readers to carefully review the legislation, which was signed into law on Thursday, August 14, 2008, as it is extensive and covers many topics outside federal student aid that may impact various entities.

We also remind readers that many provisions in this bill are effective upon enactment, and while ED has historically worked with the financial aid community to develop guidelines and deadlines for implementing changes brought about by the reauthorization process, all affected parties are responsible for ensuring compliance with the effective dates in the legislation. For many of the provisions in the HEOA, ED will either publish regulations with a notice and comment period, or conduct negotiated rulemaking sessions to provide clarification and interpretation of the law.

In today's article, we review HEOA provisions that affect Pell Grants, Academic Competitiveness Grants (ACG), National Science and Mathematics Access to Retain Talent Grants (SMART), and Teacher Education Assistance for College and Higher Education Grants (TEACH).

Pell Grant Program
A student who first receives a Pell grant on or after July 1, 2008, will be eligible to receive that funding for a maximum of 18 semesters, or the equivalent. For a student enrolled less than full time, his or her Pell grant eligibility is adjusted accordingly.

Beginning with the 2009-10 academic year, the authorized maximum Pell grant amounts are increased as follows:
- $6,000 for academic year 2009-10
- $6,400 for academic year 2010-11
- $6,800 for academic year 2011-12
- $7,200 for academic year 2012-13
- $7,600 for academic year 2013-14
- $8,000 for academic year 2014-15

Although the above amounts are the maximum award amounts for a given academic year, as in previous years, actual maximum annual Pell grant awards are dependent upon appropriation. In addition to the appropriated maximum annual amount, the College Cost Reduction and Access Act (CCRAA) set mandatory Pell grant increases through the 2012-13 award years; as a result, future annual maximum Pell awards will combine the congressionally-appropriated amount and the CCRAA increase, if any, for that particular year.

The following Pell grant-related changes are all effective July 1, 2009:

The minimum award (currently $400) is revised to 10 percent of the appropriated maximum annual amount, which does not include the CCRAA mandatory increase. A student who is eligible for between 5 and 10 percent of the maximum will receive 10 percent; a student who is eligible less than 5 percent of the maximum the student will not receive an award.
A student who is enrolled in a certificate, associate, or baccalaureate program may receive up to two Pell grants during a single award year, if the student is enrolled on at least a half-time basis for 1) a period of more than one academic year or 2) more than two semesters, or an equivalent period of time, during a single award year. The total amount of Pell grant funds awarded to such a student for the award year may exceed the appropriated maximum annual award amount for that year.
The expected family contribution (EFC) for the purpose of determining a student's eligibility for a Pell grant is set to zero for any student:
- Whose parent or guardian was a member of U.S. Armed Forces and who died as a result of performing military service in Iraq or Afghanistan after September 11, 2001; and
- Who was less than 24 years old, or was enrolled at least part time, at the time of the parent's or guardian's death.
An individual subject to an involuntary civil commitment upon completion of a period of incarceration for a forcible or nonforcible sexual offense (as determined by the FBI's Uniform Crime Reporting Program) is ineligible for a Pell grant.

ACG and SMART Grant Programs

Until July 1, 2009, the Secretary of Education will continue to be responsible for recognizing rigorous secondary school programs of study for ACG purposes. Effective July 1, 2009, rigorous secondary school programs of study will be recognized by a designated state official, in accordance with regulations in effect on May 6, 2008 (prior to enactment of the Ensuring Continued Access to Student Loans Act, or ECASLA), and will be reported to the Secretary in a timely manner so as to facilitate determinations of student eligibility.
The HEOA also delayed, from January 1, 2009, to July 1, 2009, the implementation of certain ACG and SMART Grant Program-related changes made by the ECASLA, as described in Shoptalk Online edition 460.

TEACH Grant Program

Per the HEOA, a TEACH grant recipient may fulfill the service obligation by teaching in the field for which he or she earned an academic degree, or has expertise, if that field was designated as high need at the time the student received the initial grant, even if that field is later no longer designated as a high-need field.
ED must establish regulations that define categories of extenuating circumstances under which a grant recipient may be excused from fulfilling all or part of the service obligation.

For more information
To access the bookmarked, integrated version of the HEA, including the changes made by the HEOA, visit TG Online at www.tgslc.org/policy/hea.cfm.

For questions, contact TG customer assistance at (800) 845-6267, or send an message to cust.assist@tgslc.org.

New ED website provides reauthorization information

Last week, ED unveiled a new Web page designed to provide information and updates to the financial aid community on the Higher Education Opportunity Act (HEOA), the reauthorization bill recently signed into law. The page is located at www.ed.gov/policy/highered/leg/hea08/introduction.html, and provides an outline of the steps ED will take to assist the community in understanding and implementing this new legislation.

Dear Colleague Letter
ED is developing a Dear Colleague Letter that will provide a detailed summary of the HEOA, but reminds the financial aid community that many of the provisions of the HEOA are effective upon enactment and affected parties are responsible for ensuring compliance with the provisions by their respective effective dates.

Negotiated rulemaking
Some parts of the HEOA will be implemented through new or revised regulations. For certain provisions, ED may issue regulations through the usual notice and comment process, or publish technical changes that merely reflect the changes to the HEA without expanding upon those changes.

However, for some HEOA provisions, ED will conduct negotiated rulemaking (Neg Reg) to develop regulations. Beginning in September, ED will hold four public meetings to provide the opportunity for the financial aid community to suggest topics for consideration during the Neg Reg process. ED will also accept written comments from individuals who are unable to attend one of the meetings.

ED expects to announce its intent to establish Neg Reg committees by the end of 2008, and begin negotiations in February 2009. For provisions that require more rapid implementation, the schedule will be expedited.

For more information
Shoptalk Online will keep readers informed as ED publishes additional guidance and official Neg Reg notices in the Federal Register. For questions, contact TG customer assistance at (800) 845-6267, or send an message to cust.assist@tgslc.org.

Guidance on loan purchase commitment program

On August 22, ED released the latest in a series of Electronic Announcements (E-ANN) providing guidance on the implementation of the loan purchase programs authorized by the Ensuring Continued Access to Student Loans Act (ECASLA).

This announcement, E-ANN #23, provides instructions on the execution and submission of the Master Loan Sale Agreement under the loan purchase commitment program.

For more information
Visit ED's ECASLA website at http://federalstudentaid.ed.gov/ffelp/ to view E-ANN #23 and previous updates and guidance from ED.

ED provides Q&As on loan purchase programs

ED has posted two Q&A documents to its Ensuring Continued Access to Student Loans Act (ECASLA) Web page. The documents address both the loan participation purchase program and the loan purchase commitment program. ED has also added an "Ask a Question" feature that allows readers to submit questions on the two programs directly to ED.

For more information
The Q&As, and additional information ED has released related to the passage and implementation of this legislation, are available at http://federalstudentaid.ed.gov/ffelp/.