Shoptalk 542, March 2, 2010

Industry Update

Foreign schools Neg Reg reaches consensus

The foreign schools team (Team II) of the 2009-10 negotiated rulemaking (Neg Reg) process has concluded its negotiations, successfully reaching final consensus on all of the issues the team deliberated. As a reminder, the team was considering the following issues:

United States Generally Accepted Accounting Principles (U.S. GAAP) financial statements
Compliance audits
Definition of a foreign school
Nonprofit status for foreign schools
Public foreign schools and financial responsibility
Consolidation of select Title IV requirements on a countrywide basis
Deferments for eligible non-citizens
Non-degree programs
New eligibility criteria for foreign medical schools
Clinical sites of foreign medical schools and foreign veterinary schools in other countries
Basic science locations of foreign medical schools, foreign nursing schools, and foreign veterinary schools in other countries
Eligibility requirements for foreign veterinary schools
Eligibility requirements for foreign nursing schools
Foreign medical, veterinary, and nursing schools certified separately from larger school

What's next?
ED will publish its proposed regulations in a Notice of Proposed Rulemaking (NPRM) in the Federal Register by this summer, and will provide an opportunity for public comment at that time. Final regulations are expected to be published in the Federal Register by November 1, 2010, with most or all of the new provisions becoming effective on July 1, 2011.

More information
Please visit ED's "Negotiated Rulemaking for Higher Education 2009-10" Web page for more information, including a list of the negotiators, issue summaries for each topic, and ED's most-recently posted proposed language. Note that the posted language will not reflect any revisions considered during the final team meeting last week.

ED relocates FAFSA gender question

On February 26, 2010, ED released an electronic announcement regarding the relocation of the question "Are you male or female?" on the 2010-2011 FAFSA on the Web. The update was effective February 27, 2010.

ED moved the gender question from a location in close proximity to fields that are prefilled with data provided earlier in the process (such as first and last name), to a more visually prominent location below the "Your Date of Birth" question. The move was in response to an increasing number of applicants who were leaving the gender question blank, thus slowing the application process and creating extra work. In cases where the gender question is left blank and the applicant is in the age range that requires registration with the Selective Service, the Central Processing System (CPS) automatically sends the applicant's data to the Selective Service for matching. If the Selective Service is unable to verify registration, a SAR C flag is set on the resulting Student Aid Report (SAR) and Institutional Student Information Record (ISIR). ED believes the new, more prominent location will decrease the number of FAFSA on the Web applications processed with a SAR C flag.

Contact Information
If you have questions regarding FAFSA on the Web, please contact the Federal Student Aid Information Center at (800)4-FED-AID, or (800) 433-3243, or by email at FederalStudentAidCustomerService@ed.gov. TDD/TTY service is also available at (800) 730-8913. When prompted to speak a menu option, say "website assistance."

Survey on ED servicers to begin March 1

On February 23, 2010, ED posted an electronic announcement regarding the second quarter (January to March 2010) surveys of its servicers beginning March 1, 2010. ED's four new servicers — FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae — support loans for which ED is the holder, namely William D. Ford Federal Direct Loan Program (FDLP) loans and Federal Family Education Loan Program (FFELP) loans purchased by ED under the Ensuring Continued Access to Student Loans Act (ECASLA). Per contractual agreement with each servicer, ED will annually measure servicer performance in the areas of customer satisfaction and default prevention, using the results to determine each servicer's allocation of future loan volume.

Satisfaction of Borrower and School Customers
To measure customer satisfaction, on ED's behalf, an independent vendor will conduct quarterly telephone surveys of borrowers, schools, and federal personnel beginning March 1, 2010. Surveyors from Discovery Research Group will contact a random sample of borrowers, and surveyors from OLC Global will contact a random sample of schools. Both surveys have been designed to take no more than 10 minutes to complete and will be conducted in a manner that ensures the anonymity of all respondents.

Notes for School Survey Participants:

Although a school may be working with more than one of the four new servicers, the school customer will be asked to respond about experiences with only one servicer identified by the vendor.
School responses should be limited to experiences related to federally owned loans — FDLP and FFELP loans held by ED — even if the customer has other loan servicing experiences with the servicer.
If a school customer who does not work with federally owned loans is contacted by the independent vendor, the school customer should provide to the vendor the name of a colleague who does work with federally owned loans.

More information
The announcement is available on the Information for Financial Aid Professionals website.

HRSA extends deadline for Nursing Loan Repayment Program

As baby boomers age and the need for healthcare grows, colleges and universities across the country are struggling to expand enrollment levels to meet the rising demand for nurses amidst a national nursing shortage. The U.S. Department of Health and Human Services' Health Resources and Services Administration (HRSA) has extended the application deadline of its Nursing Education Loan Repayment Program (NELRP) until 5:30 p.m. Eastern Time on March 11.

To alleviate the critical shortage of registered nurses (RNs) in certain types of nonprofit healthcare facilities and to decrease the economic barrier that may be associated with the rising costs of obtaining a nursing degree, NELRP participants — in addition to the salary and benefits they have negotiated with their employing facility — receive 60 percent of their total qualifying nursing education loan balance in exchange for two years of service. For an optional, third year of service (subject to the availability of funds), participants may receive 25 percent of their original total qualifying loan balance.

Eligibility requirements
To be eligible to apply, an RN must meet all of the following requirements by the application deadline:

Be a U.S. citizen (born or naturalized) or National; and Lawful Permanent Resident
Receive a baccalaureate or associate degree in nursing (or an equivalent degree), a diploma in nursing or a graduate degree in nursing from an accredited school located in a U.S. state;
Have a current, full, permanent, unencumbered, unrestricted license as an RN; and
Be employed full-time (32 hours or more per week) at an eligible nonprofit facility.

Also an eligible RN must agree to serve two, consecutive years at the eligible nonprofit facility listed in the application. No service credit will be given for employment at an eligible facility before the effective date of the NELRP contract. If an applicant fails to commence full-time service on the effective date of the contract at the identified eligible facility, he or she may be placed in default.

An RN is ineligible to participate in NELRP if he or she defaulted on any federal payment obligations (e.g., Health Education Assistance Loans, Nursing Student Loans, FHA loans, federal income tax liabilities, etc.) or non-federal payment obligations (e.g., court-ordered child support payments), even if he or she is currently considered to be in good standing by that creditor. In addition an RN who has an existing service obligation that will not be satisfied by the application deadline — with the exception of individuals in a Reserve component of the Armed Forces or National Guard — is ineligible for participation in NELRP. See the Application and Program Guidance for other disqualifying factors and more detailed information.

Employment facility requirements
Only nonprofit facilities of the following types are eligible:

Hospitals
Federally Qualified Health Centers and Look-Alikes, Indian Health Service Health Centers, Native Hawaiian Health Centers, Rural Health Clinics
Nursing Homes
State or Local Public Health or Human Services Department
Hospice Programs
Home Health Agencies
Skilled Nursing Facilities
Ambulatory Surgical Centers

First preference for funding is given to qualified RNs whose total qualifying educational loans are 40 percent or greater than their base annual salary and who are working in the types of heath care facilities that have the most severe nursing shortage. There is no list of eligible facilities. For more detailed descriptions of each of the types of eligible facilities, see the Application and Program Guidance.

Loans eligible for repayment
A NELRP participant will receive funds to repay a portion of the outstanding principal of, and interest on, qualifying educational loans obtained by the participant at the time of the participant's undergraduate and/or graduate qualifying nursing education. Examples of qualifying educational loans include: Nursing Student Loans, Stafford Loans, and Supplemental Loans for Students.

Loans obtained for non-nursing education, made prior to, or after, the applicant's qualifying nursing education, and Parent PLUS loans are not eligible for repayment under NELRP. Also ineligible for NELRP repayment is any portion of a consolidated/refinanced educational loan that is not clearly identified as an underlying qualifying educational loan. In addition, certain Federal Perkins loans are not eligible. For more details of ineligible loans, see the Application and Program Guidance.

More information
Complete information, supplemental documentation, and online application are available at HRSA's Nursing Education Loan Repayment Program's Web page.

Closed school corner

The following table provides a list of newly reported school closures and corrections from the Postsecondary Educational Participants System (PEPS) and from the February 2010 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.

Newly reported closures
OPE School ID	School Name/Address	Unofficial Closure Date	ED's Official Closure Date
02091701	Kaplan College — Renton 500 SW 39th St., Ste. 155 Renton, WA 98057-4915	N/A	12/31/2009