Budgets, Policies, and NegRegs NYSFAAA Government Relations Committee March 2007.
-
Upload
charla-arnold -
Category
Documents
-
view
214 -
download
1
Transcript of Budgets, Policies, and NegRegs NYSFAAA Government Relations Committee March 2007.
Budgets, Policies, and NegRegs
NYSFAAA Government Relations Committee
March 2007
New York State Governor’s Budget
No TAP increases– Cutting Ability-to-Benefit would affect
8,000. $100 increase per student at community
colleges. Reduce Bundy Aid by $4.2 million. Reduces the subsidy to teaching
hospitals for medical residents.
New York State Senate Budget Proposals
TAP– Increase family income eligibility cap for minimum
award from $80,000 NTI to $100,000.– Raise the minimum award from $500 to $1000.– Increase independent income cap from $10,000
NTI to $12,500.– Adjust the TAP award schedule accordingly.
NYS – Senate
Tuition Tax Credits
Would expand tuition tax credits from maximum of $400 to $700.– Figured at 5% of tuition paid up to $14,000
Student Loan Debt Relief Program– Tax credit for graduates of NYS colleges
up to $1,000 per year.• Must be an employed NYS resident• Must be earning less than $50,000 per year• Can claim for up to 5 years
NYS – Senate
Math/Science/Eng. Retention
1,000 grants per year of $1,000 each to– NYS residents with undergrad. or grad. Degrees in
math, science, or engineering technology– Degree awarded in 2007-08 academic year or
later– Employed in any science, engineering or
technology field (but not teaching)– Can be claimed up to 5 years.– 1,000 new awards per year until reaching 5,000
NYS – Senate
Math and Science Teaching Incentive Program
Expands this existing program from 500 awards to 750 annually.
Provides grants equal to SUNY tuition for students enrolled in approved teacher certification programs.– Must agree to teach math or science in
NYS for five years
NYS – Senate
Veterans
Would increase the maximum tuition assistance grant to veterans of the Vietnam, Persian Gulf, Afghanistan, or Iraq Wars from $2,000 to the amount of SUNY tuition (currently $4,350).
NYS – Senate
Independent Colleges
Would restore $3.78 million for Bundy Aid that the Governor’s budget cut.
NYS Assembly Budget Proposal
No TAP enrichment $62.38 million more than Spitzer’s
budget for:– $15 million for SUNY operating aid– $10 million for CUNY operation aid– 5% increases in EOP, HEOP, SEEK,
College Discovery, Liberty Partnerships
NYS Assembly
Also– $10 million for EOCs
And to help prevent tuition or property tax hikes at the local level– $8.16 million for SUNY community colleges– $3 million for CUNY community colleges
And Capital Improvements– $75.9 million for SUNY– $30 million for CUNY
FEDERAL A Continuing Resolution for current-year (FY2007-08) spending
The 109th Congress failed to complete this budget work, allowing the Democratic majority now in power to change the original plan.
Called a Joint Funding Resolution, it was crafted by leading Democrats in both the House and Senate, with little input from others.
Already passed by House, it requires Senate to pass it, and Bush to sign it.
Fed.– Continuing Resolution
Found Money?
They shifted $2.3 billion from “earmarks,” military base closings, and other areas.
Earmarks often go to colleges $1 Billion went to Pell Grants $620 million to biomedical research at the
Nat’l. Insts. Of Health Also funds to Nat’l Science Found. And the
Energy Department’s Office of Science
Fed.– Continuing Resolution
Pell Grants
Increase by $260 for 2007-08
Maximum Grant would be $4,310
Federal President’s Budget
$2.9 Trillion ($9,667 for every resident)
Pell Grant maximum of $4,600 for 2008-09– The $550 increase would cost $2 billion
Rise in $200 increments to $5,400 in FY 2012
Fed.– President’s Budget
Pell/ Need Analysis Pell Grants available year-round at 2 and 4-
year schools Limit eligibility to the equivalent of 16
semesters to encourage graduation Eliminate the tuition sensitivity rule that
penalizes students at low cost schools
Exclude from Needs Analysis all savings in 529 plans
Fed.– President’s Budget
ACG/SMART
1st year ACG increase from $750 to $1,125 for FY 2008
2nd year from $1,300 to $1,950 for 2008– Only $140 million of the $790 million
available for this year has been awarded Modest increase in SMART Grants
Fed.– President’s Budget
Loans
$2,000 increase, to $7,500, in maximum Stafford for 3rd and 4th years
An increase in aggregate borrowing is presumed, but not clear
PLUS interest to be reset at 8.3% for both DL and FFEL
Fed.– President’s Budget
At What Cost?
Eliminate SEOG– High admin. Cost – 250 times cost of Pell– Dollars don’t always go to schools serving the
neediest, nor to the neediest at the schools
Eliminate LEAP, Byrd Honors Scholarships, Thurgood Marshall Legal Education Opportunity Program
No new FCC to Perkins Loans, and recall all Federal capital from schools
Fed.– President’s Budget
Lender and Guarantor Cuts Reduce lender subsidy above current
commercial paper rates from 2.34 to 1.84% Increase fee to make a consolidation loan
by .5% of the amount of the loan Guarantors reimbursed for 95% of a defaulted
loan, down from 97% Decrease guarantor default collection
payments, and changes the way account maintenance fees are calculated.
Total saved = $19 Billion over 5 years
Fed.– President’s Budget
Policy Items $25 million “for a voluntary pilot initiative that
will collect and analyze student data to measure outcomes such as graduation rates. This initiative will help ensure accountability and transparency in higher education.”
$24 million for a new grant program to increase the number of speakers of “critical languages”
Intends to implement ED and IRS program to verify income and taxes.
Senate Democrats FY08 Budget Resolution
Just introduced Contains $6.1 billion more than the
Presidents Budget for the Education Department
Does not spell out spending levels for individual programs, but sets ceilings for broad categories.
COLLEGE AID MADE EZ ACT
Introduced in House by Miller (D-CA), Chair of House Education and Labor Committee, and Emanuel (D-IL); similar bill introduced in Senate by Kennedy (D-MA)
Reduces FAFSA from 5 pages to 2 Provides a “Pre-FAFSA” as a forecast tool for
H.S. juniors (similar to FAFSA4Caster from ED, available April 1)
Hinges on IRS supplying the income data from tax returns
Federal Kennedy’s Student Debt Relief
Act Not really a budget bill, but has major
cost considerations. Would increase Pell Maximum to
$5,100 for 2007-08. $300 increases each year to a
maximum of $6,300 in 2011-12. Would make funding an entitlement.
Fed.– Debt Relief Act
Student Loan Interest
Would match HR5, passed by the House, by cutting interest rates on subsidized, undergraduate student loans to 3.4% by 2011-12.
Fed.– Student Debt Relief Act
Student Aid Reward Program (STAR)
Encourages colleges to utilize the student loan program that is “most cost-effective for taxpayers.”
50% of the savings shared with the colleges after 5 years participation.
Could supplement awards to Pell Grant recipients, or make grants to low-or-middle income graduate students.
Fed.– Student Debt Relief Act
Other Loan Reforms Direct Lending origination fees become optional
at the discretion of the Secretary of Education.– DL fees would be reduced another 1% during the
current phase-out period. • Corresponds to the 1% Default Fee charged to FFELP
borrowers
In-School consolidation resurrected.
Reconsolidation would become possible.
Fed.– Student Debt Relief Act
Hardships
Partial Financial Hardship deferment category created– Would limit monthly payments to 15% of
borrower’s income that exceeds 150% of poverty for their family size.
– Would allow unlimited length of hardship deferments.
– Would cancel any remaining debt after 25 years of being in a hardship or partial hardship category.
Fed.– Student Debt Relief Act
Income Tax Deduction
Would increase the income tax tuition deduction from $4,000 to $8,000 in 2007– To $12,000 in 2008– Income limits to qualify would be increased based
on inflation.
Tax deductions for interest paid would become credits.– Qualifying income tied to inflation
NEG/REGs
ACG/SMART Grants
NegRegs: Modify Definition of Academic Year to be Consistent with how Institutions Measure Progress? ED says it can’t, as the term has a long-
standing definition based on credits (or clock hours) and weeks.
NegRegs: Mandatory Participation
All Pell-eligible schools must participate in the ACG/SMART programs
In cases of ‘visiting’ status, the school that pays Pell must also pay ACG/SMART grants
NegRegs: Eligible Program
Certificate programs will continue to be ineligible for ACG/SMART
NegRegs: Eligible Majors
Set up a procedure for schools to petition for additional eligible majors;
Set up procedure to validate a students intent to declare a major that is eligible at schools where students don’t have to declare majors until after start of the junior year.
NegRegs: Unresolved Areas
Treatment of credit earned through AP/IB, and credit earned in H.S. through dual-credit and early college programs– These issues related to academic year
progression and GPA calculation
NegRegs: Loan Issues
Preferred lists OK if– Student is not prevented from choosing
any lender– Contains at least 3 lenders– Does not contain any lender that has
offered – or that has been solicited to offer by a school – any financial or other benefit to be part of the list
NegRegs: Prohibited Inducements
Payments or offerings of any kind – including prizes to the prospective borrower in exchange for a loan application
Payments or offerings of any kind to a school, or any school-affiliated organization in exchange for loan applications
Payments to any student acting as a lender’s representative at a school to try to secure loan applications
More Prohibited Inducements
Payment of referral or processing fees to another lender that exceeds “reasonable compensation for the handling and marketing of FFEL loans” by the processing lender that are based on the volume or dollar amount of originated FFEL loans
More Prohibited Inducements Payment of entertainment expenses for employees at a
school or any school-affiliated organization, including:– Private hospitality suites– Tickets to show or sporting events– Meals or alcoholic beverages– Lodging, rentals, transportation or any other expense related to
lender-sponsored social activities– The undertaking of any philanthropic activities such as
scholarships in exchange for applications or to be placed on a preferred lender list
– Preferential rates to other lender products– Computer hardware or software– Printing or distribution of college materials
NegRegs: Approved Activities
Assistance to schools comparable to that provided by ED to schools in DL
Temporary, emergency staffing services to a school
Support of a guarantor agency’s college access and outreach activities
Meals, and receptions that are scheduled in conjunction with open meetings or conferences
Toll free phone numbers for use by schools
More Approved Activities
Borrower benefits such as origination fees, reduced interest rate, or benefits that require one or more scheduled payments
Payment of a default fee by guarantors Reasonable travel and lodging costs – by
guarantors only – to facilitate school staff training, guarantor service facility tours, or for schools to participate in the activities of an agency’s governing board, etc.
Items of nominal value that are given as tokens of good will
NegRegs: GradPLUS Entrance Counseling If a student doesn’t request their maximum
Stafford loan, the school must provide a comparison that shows:– The maximum interest rates in both programs– The different interest accrual rates– The different repayment start dates
All GradPLUS borrowers must get entrance counseling in the same manner as Stafford Loan Borrowers
NegRegs: Length of a Loan Period
Institutions will be allowed to certify a single loan for students in non-term or nonstandard term programs in excess of 12 months.– You would still use the definition of an
academic year as defined in 34 CFR 668.3, but would no longer need to worry about exceeding a 12-month period.
NegRegs: Other Areas of Regulation Frequency of Capitalization – only at the
end of a deferment/forbearance period Simplification of Deferment Granting
Process – you can grant a deferment if another FFEL lender or ED has granted a deferment for the same reason, for the same time period, unless you have conflicting information. This is simple?
House Committee asks for Help
“We invite you to share with us your best ideas……….”
Increasing college access and success Improving the financial aid delivery system Improving academic, financial, and social
college preparation for students Improving programs designed to distribute
and leverage need-based student aid Address increasing college costs Increasing transparency of college costs and
the accreditation process
ACG/SMART Grant Training
A Series of ED Workshops
http://www.ed.gov/offices/OSFAP/training/index.html
April 18 – Hartford, CT May 8 – NYC May 10 – Newark, NJ May 15 - Boston May 16 – Syracuse June 19 – Randolph Center, VT