Federal Updates

Neg Reg announcement

On December 31, following six regional hearings held last fall to gather public input on federal regulatory issues, ED published a Federal Register notice of multiple negotiated rulemaking (a.k.a. Neg Reg) sessions scheduled to begin next month.

Neg Reg in a nutshell
Neg Reg is a process used by some 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 session.

2009 Neg Reg
In this Neg Reg process, ED plans to establish five committees, or "teams," to develop proposed regulations on changes made to the Higher Education Act (HEA) by the Higher Education Opportunity Act of 2008 (HEOA). The teams will consider the following topics:

• Team I: Loans — Lender/General Loan Issues
• Team II: Loans — School-based Loan Issues
• Team III: Accreditation
• Team IV: Discretionary Grants
• Team V: General and Non-Loan Programmatic Issues

ED notes that because of the large volume of changes made by the HEOA that must be implemented through Neg Reg, not all provisions will be regulated at this time. In particular, provisions affecting foreign schools (the majority of which are not effective until July 1, 2010) and unfunded programs will be considered at future Neg Reg sessions. Regulations implementing HEOA changes to other areas of Title II of the HEA, as well as Titles III, V, VI, and VII, and those areas of Title I that do not affect the Title IV programs, will be implemented either through notice and comment rulemaking or, where the regulations will merely reflect the changes to the HEA and not expand upon those changes, without notice and comment.

How to get involved
The Federal Register notice also calls for nominations for individual negotiators. Neg Reg committees are composed of representatives of organizations or groups with interests that are significantly affected by the subject matter of the proposed regulations, namely, the Title IV student financial assistance and grant programs. Negotiators must be involved in and have demonstrated expertise or experience in the relevant subjects under negotiation. Nominations must be submitted by January 23, 2009.

Timeline
ED anticipates that negotiations for these committees will begin in February 2009, with each committee meeting for three sessions of approximately three days at roughly monthly intervals. The schedule for negotiations has been developed to ensure publication of the final regulations by November 1, 2009, with implementation of the new regulations no later than July 1, 2010.

More information
Shoptalk Online will provide regular updates to keep you informed about the progress of Neg Reg. The Federal Register notice is available online at http://edocket.access.gpo.gov/2008/pdf/E8-31176.pdf.

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Loan purchase programs guidance

ED recently released Electronic Announcements (E-ANN) #41 and #42, providing additional guidance on the implementation of the new Short-Term Loan Purchase Program authorized by the Ensuring Continued Access to Student Loans Act (ECASLA). For more information about this program, see Shoptalk Online edition 483.

E-ANN #41 notes a correction to the 2007-08 Master Loan Sales Agreement under the Short-Term Loan Purchase Program. E-ANN #42 provides ED's lender ID for the purpose of tracking and reporting the 2007-08 loans purchased under the Short-Term Loan Purchase Program.

For more information
The E-ANNs are available online at http://federalstudentaid.ed.gov/ffelp.

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ED issues DCL on the HEOA

On December 31, 2008, ED issued a Dear Colleague Letter (DCL) GEN-08-12/FP-08-10, providing a summary of most of the provisions of the Higher Education Opportunity Act (HEOA) of 2008, which amended and reauthorized the Higher Education Act (HEA) of 1965. This 219-page letter, which may be accessed on the Information for Financial Aid Professionals (IFAP) website at http://ifap.ed.gov/dpcletters/GEN0812FP0810.html, organizes the provision summaries by the title of the HEA that is being amended and further arranges the information by topic within each title. A chart is included at the end of the letter that groups the provisions by effective date.

The provisions of the HEOA were effective upon enactment, August 14, 2008, unless otherwise noted in the law. Institutions should use these summaries in conjunction with reviewing the text of the HEOA itself. TG provides convenient integrated versions of the HEA on its website at www.tgslc.org/policy/hea.cfm. In these integrated versions, revisions made to the HEA by the HEOA are set in blue text (underline for new text and strikethrough for deleted text).

The summaries provided in the DCL do not change any requirements in the law and are provided to aid understanding of the changes to the HEA. Affected parties are responsible for taking the steps necessary to comply by the effective dates established by the HEOA, unless the HEOA specifies that regulations are necessary to implement certain provisions, or, if so indicated by ED, operational steps must be taken by ED before parties may comply. Because this will require program participants to implement a large number of new provisions before receiving guidance from ED, any written guidance provided, or, as applicable, the absence of such guidance, will be taken into account during subsequent reviews for compliance with the HEOA.

As required by the HEA, ED will issue regulations for some of the programs affected by the HEOA through the negotiated rulemaking process (see previous article). To follow ED's implementation of the HEOA, please refer to ED's HEOA website at www.ed.gov/HEOA.

Shoptalk Online will provide additional information about this DCL in upcoming editions as we continue to review and analyze the document.

More information
For questions about the HEOA or negotiated rulemaking, call TG customer assistance at (800) 845-6267, or send an message to cust.assist@tgslc.org.

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Final rules 101: The ins and outs of Public Service Loan Forgiveness

Shoptalk Online continues its exploration of the final rules published by ED on October 23, 2008, with a focus on the Public Service Loan Forgiveness Program, a loan forgiveness program for Direct loan borrowers created by the College Cost Reduction and Access Act (CCRAA).

Intended to encourage individuals to work in the public service sector, the Public Service Loan Forgiveness Program will provide forgiveness of the remaining outstanding balance of principal and accrued interest on a borrower's Direct Loan(s) if the borrower makes 120 monthly payments after October 1, 2007, and the loans are not in default. The types of Direct loans that may be forgiven under this program include Direct subsidized and unsubsidized Stafford loans, Direct PLUS loans (for parents or graduate professional students), and Direct Consolidation loans.

Eligibility criteria
To be considered for loan forgiveness under this program, the borrower must be working full-time for a public service organization, as defined in the final regulations.

The term "public service organization" includes the following:

• A federal, state, local, or tribal government organization, agency, or entity (excluding the U.S. Congress)
• A public child or family service agency
• A non-profit organization under Section 501(c)(3) of the Internal Revenue code that is exempt from taxation under Section 501(a) of the code
• A Tribal college or university, or
• A private organization that provides the following public services:
  • Military service
  • Emergency management
  • Public safety
  • Law enforcement
  • Public interest law services, including prosecution, public defense, or legal advocacy in low-income community at a non-profit
  • Early childhood education, including Head Start, state-funded pre-kindergarten, or licensed or regulated health care
  • Public service for the elderly and for individuals with disabilities
  • Public health, including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care occupations and support
  • Social work in a public child or family service agency
  • Public library sciences and education
  • School-based library sciences
  • Other school-based services

The term "full-time" means working in qualifying employment in one or more jobs for the greater of:

• An annual average of at least 30 hours per week; or
• The number of hours the employer considers full-time, unless the qualifying employment is with two or more employers.

Vacation or leave time provided by the employer or leave taken under the Family Medical Leave Act do not count against the average hours worked for the annual basis.

Qualifying number of payments and repayment plans
The borrower must have made 120 monthly payments on his or her Direct loan under one or a combination of the following Direct loan plans:

• An income-based repayment plan
• An income-contingent repayment plan
• A standard repayment plan based on a 10-year repayment period

If the borrower is repaying a Direct Consolidation loan, the monthly payment amounts must not be less than the equivalent amounts paid under a Direct loan standard repayment plan based on a 10-year period.

Options for FFELP borrowers
Effective July 1, 2008, a FFELP borrower may consolidate his or her FFELP loans into a Direct Consolidation loan if the borrower intends to be eligible to use the Public Service Loan Forgiveness Program. Payments made on those FFELP loans prior to the consolidation will not count toward the 120 monthly payment requirement.

The application process
ED has indicated that it will develop an application form for the Public Service Loan Forgiveness Program. This form will include all necessary information for the borrower and employer on eligibility criteria, applicable definitions, and procedures for applying. In addition, the form will contain an employer certification section and instructions on supporting documentation that ED will need in determining the borrower's eligibility for forgiveness. The borrower will be responsible for collecting the employer certification either annually or at the close of the 120 payment qualifying period, and collecting and retaining the necessary records that support his or her eligibility for the loan forgiveness.

Because the first forgiveness will not likely occur until after October 1, 2017, there is sufficient time to explore and design the operational procedures necessary to administer this program.

For more information
The final rules on the Public Service Loan Forgiveness Program are located in 34 CFR 685.219. An integrated version of the regulations is available from TG Online at www.tgslc.org/policy/intreg.cfm. Additional information can also be found in Dear Colleague Letter GEN-08-01, and in HEA 455(m)(3)(B).

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NSLDS Newsletter #22 available

ED has released NSLDS Newsletter #22, which announces new online access requirements for users of the National Student Loan Data System (NSLDS) and describes Student Eligibility Enhancements for the 2009-10 award year. These changes, which are effective January 2009, include:

• A new Rules of Behavior confirmation page;
• Annual Security Acknowledgment Training, which is tailored to the type of access associated with the organization type (e.g., school, lender, guaranty agency, state agency), and whether or not the NSLDS user is a Primary Destination Point Administrator (PDPA);
• Verifying borrower relationship for lender and lender servicer users (applies only to users at lenders and lender servicers). Beginning January 1, NSLDS will require a reason for lenders and lender servicers to retrieve a record for a Title IV aid recipient with whom an established relationship does not exist on NSLDS; and
• 2009-10 Student Eligibility Enhancements.

More information
To access NSLDS Newsletter #22, visit the Information for Financial Aid Professionals (IFAP) website at http://ifap.ed.gov/nsldsmaterials/Newsletter22.html.

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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 ED. Schools listed are those with which TG has done business or to which TG has otherwise provided services.

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