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Title: College Cost Reduction and Access Act CCRAA Draft Document as of 12307 Does not include ED guidance


1
College Cost Reduction and Access Act
(CCRAA)Draft Document as of 12-3-07Does not
include ED guidance
  • Prepared by the NCHELP Program Regulations
    Committee
  • This presentation provides a summary of the
    changes contained in the College Cost Reduction
    and Access Act (CCRAA). Readers should refer to
    the detail of the law and sub-regulatory guidance
    from the U.S. Department of Education in
    determining all relevant issues.

2
Introduction
  • The CCRAA was passed by the House and Senate on
    Friday, September 7, 2007.
  • The bill was signed by President Bush on
    September 27, 2007.

3
Effective Dates and Triggers
  • In general, the changes made by CCRAA have an
    effective date of October 1, 2007.
  • However, certain changes have different effective
    dates.
  • Many of the changes are effective in the future.

4
Effective Dates and Triggers
  • Knowing an effective date is not enough in many
    cases.
  • To properly implement a change, you also need to
    know the trigger event.
  • We are waiting on the DCL from the Department.

5
School Issues
6
Professional Judgment
  • The examples of circumstances under which an FAA
    may exercise professional judgment are expanded
    to include
  • Unemployment of an independent student
  • Change in housing that results in homelessness
    as defined by the McKinney-Vento Homeless
    Assistance Act
  • A family member who is a dislocated worker
  • Trigger Event date
  • ??? Event effective 7/1/2007 (2009 2010 award
    year)

7
Professional Judgment
  • Allows an FAA to grant a dependency override for
    unusual circumstances (e.g., abandonment) for
    mid-year transfer students based on the
    documented determination of another FAA during
    the same award year.
  • Trigger Event date
  • ??? Event effective 7/1/2007 (2009 2010 award
    year)
  • 479A(a)

8
TEACH Grants
  • Program Established
  • Effective 7/1/2008, and subject to regulations
    promulgated by ED, a new TEACH Grant of up to
    4,000 per academic year is available for
    undergrad and post-baccalaureate students who are
    teacher candidates, or for grad students who are
    current or prospective teachers.
  • 420M(a)

9
TEACH Grants
  • Definitions
  • Eligible Institution means an institution of
    higher education as defined in section 102, that
    the Secretary determines
  • provides high quality teacher preparation and
    professional development services, including
    extensive clinical experience as a part of
    pre-service preparation
  • is financially sound

10
TEACH Grants
  • Provides pedagogical coursework, or assistance in
    the provision of such coursework, including the
    monitoring of student performance, and format
    instruction related to the theory and practices
    of teaching and
  • Provides supervision and support services to
    teachers, or assistance in the provision of such
    services, including mentoring focused on
    developing effective teaching skills and
    strategies.

11
TEACH Grants
  • Post-baccalaureate
  • Program of instruction for individuals who have
    completed a baccalaureate degree, that does not
    lead to a graduate degree, and that consists of
    courses required by a State in order for a
    teacher candidate to receive a professional
    certification or licensing credential that is
    required for employment as a teacher in an
    elementary or secondary school in that State,
    except that school term shall not include any
    program of instruction offered by an eligible
    institution that offers a baccalaureate degree in
    education.

12
TEACH Grants
  • Teacher Candidate
  • Student or teacher described in subparagraph (A)
    or (B) of section 420N(a)(2)
  • 420L

13
TEACH Grants
  • No less than 85 percent of any funds requested by
    a eligible institution to pay TEACH Grants will
    be advanced prior to the start of each payment
    period until ED establishes regulations, subject
    to public comment, for a disbursement system.
  • 420M(b)(1)
  • Grant amounts may be paid directly to qualifying
    students attending eligible institutions that
    elect not to participate in EDs disbursement
    system.
  • 420M(b)(2)

14
TEACH Grants
  • Grant amounts paid to a eligible institution may
    be credited to the students account to pay
    tuition, fees, room and board, if applicable, and
    for other services or goods with the students
    authorization.
  • 420M(b)(3)
  • Grants for students enrolled less than full time
    are ratably reduced in accordance with a schedule
    published by ED.
  • 402M(c)(1)

15
TEACH Grants
  • An eligible teacher candidate may receive up to
    4,000 for each academic year of attendance.
  • 420M(a)(1)
  • The sum of a students annual TEACH Grant award
    and other aid cannot exceed the cost of
    attendance.
  • 402M(c)(2)
  • Maximum aggregate TEACH Grant eligibility for an
    undergraduate student is 16,000. A graduate
    student is eligible for an additional, maximum
    aggregate amount of 8,000.
  • 420M(d)(1)(B) 402M(d)(2)

16
TEACH Grants
  • Student Eligibility Undergraduate and
    Post-Baccalaureate Program
  • Grant recipients must attend an eligible
    institution determined by ED to have high quality
    teacher preparation and development services.
  • Applicants must be Title IV eligible and have a
    minimum 3.25 GPA (for first-year undergraduates,
    GPA is based on the students cumulative
    secondary eligible institution GPA), or score at
    least in the 75th percentile in an undergraduate,
    post-baccalaureate, or graduate admissions test.
  • 420N(a)(2)(A)

17
TEACH Grants
  • Student Eligibility Graduate Program
  • Grant recipients must attend an eligible
    institution and submit an application.
  • A graduate student must be a current teacher or a
    retiree from another occupation with expertise in
    a teacher shortage area or the applicant must be
    or must have been a teacher using a high quality
    alternative certification such as Teach for
    America to get certified.
  • 420N(a)(2)(B)

18
TEACH Grants
  • Eligible coursework includes noncredit, remedial
    and ESL courses that the eligible institution
    determines are necessary, and study-abroad
    programs.
  • 420M(d)(3)

19
TEACH Grants
  • Agreement to Serve
  • TEACH Grant recipients must serve as a full-time
    teacher in a low-income school for a total of at
    least 4 academic years within 8 years after
    completing the program for which the recipient
    received a TEACH Grant.

20
TEACH Grants
  • A TEACH Grant recipient must be a highly
    qualified teacher of math, science, foreign
    language, bilingual education, special education,
    or a reading specialist, or teach in another
    high-need field as determined by the federal
    government, a state government, or a local
    educational agency, and approved by ED.
  • 420N(b)(1)(A)-(C)

21
TEACH Grants
  • Grant recipients must submit evidence of
    employment (a certification by the chief
    administrative officer of the school) upon
    completion of each year of teaching service.
  • 420N(b)(1)(D)
  • A TEACH Grant recipient who fails to complete any
    of the teaching service requirements is required
    to repay the grant amount, with interest, as a
    Direct Loan.
  • 420N(c)

22
College Access Challenge Grants
  • Creates a new program that provides federal
    matching funds to States (or philanthropic
    organizations if the State does not apply or
    cannot meet the matching funds requirement) for
    the purpose of providing any of the following
  • Information about the benefits of postsecondary
    education
  • Postsecondary education opportunities
  • Planning for eligible institution
  • Career preparation

23
College Access Challenge Grants
  • Information on financing an eligible institution
    education
  • Financial literacy and debt management
  • Outreach for students who are at risk of not
    enrolling in an eligible institution
  • Assistance in completing the FAFSA
  • Need-based grant aid for eligible institution
    students
  • Professional development for high school
    counselors
  • Student loan cancellation or repayment, or
    interest rate reductions, for borrowers employed
    in a high-need geographical area or a high-need
    profession in a State
  • 771(f)(1)

24
College Access Challenge Grants
  • The federal share of the grant for a fiscal year
    is 2/3rds of the cost of activities and services
    carried out under the grant. No more than 6 of
    the federal share may be used for administrative
    purposes.
  • The non-federal share (1/3rd) may be cash or
    in-kind and may be provided from State resources,
    contributions from private organizations, or
    both. The federal share will be reduced
    proportionately to any amount of the non-federal
    share that the State fails to provide.
  • 771(b)(2)

25
College Access Challenge Grants
  • The minimum grant amount for a fiscal year is not
    less than .5 of the total 66 million
    appropriated for each year.
  • The State agency with jurisdiction over higher
    education, or another agency designated by the
    Governor, must submit an application to ED that
    includes descriptions of
  • The grantees capacity to administer the program
  • The grantees plan for using the funds
  • How the grantee will provide or coordinate the
    provision of the non-federal share
  • The structure in place to administer activities
    and services, or the plan to develop that
    administrative capacity
  • 771(d)(2)

26
College Access Challenge Grants
  • A grantee receiving a College Access Challenge
    Grant will be required to prepare and submit an
    annual report to ED on the activities and
    services provided and on the implementation of
    such activities and services. The report must
    include the following components
  • A listing of each activity or service that was
    provided to students and families over the course
    of the year,
  • The cost of providing each activity or service,
  • The number, and percentage, if feasible and
    applicable, of students who received each
    activity or service and
  • The total contributions from private
    organizations included in the grantees
    non-Federal share for the fiscal year.
  • 771(h)

27
College Access Challenge Grants
  • Funding
  • 66 million is provided to fund this program for
    federal fiscal year 2008 and 2009 only
  • Trigger Event Date
  • ????????
  • 771(a)

28
Borrower Issues
29
Interest Rates
  • FFEL interest rate decrease
  • Subsidized Stafford ONLY
  • Undergraduates ONLY
  • First disbursed on or after the respective July 1
  • 7/01/08 through 6/30/09 6.00
  • 7/01/09 through 6/30/10 5.60
  • 7/01/10 through 6/30/11 4.50
  • 7/01/11 through 6/30/12 3.40
  • Returns to current rate of 6.8 as of 7/1/2012
  • 427A(1)

30
Loan Forgiveness for Public Service Employees (DL)
  • ED will cancel the balance of interest and
    principal outstanding at the end of the 10- year
    period on any eligible Direct loan (Stafford
    Subsidized Unsubsidized, PLUS and Consolidation
    loan)
  • That is not in default
  • Borrower must make 120 monthly payments on any
    Direct loan after 10/1/07
  • 455(m)

31
Loan Forgiveness for Public Service Employees (DL)
  • The borrower must make the monthly payments under
    income-based, standard or income contingent
    repayment plan
  • Additionally, the borrower
  • Must be employed in a public service job at the
    time of the cancellation, AND
  • Must have been employed in a public service job
    during the period in which each of the 120
    payments were made.
  • 455(m)

32
Loan Forgiveness for Public Service Employees (DL)
  • Definition of Public Service Job
  • A full-time job in public emergency management,
    government, military, public safety, public law
    enforcement, public health, public education,
    public early childhood education, public child
    care, social work in a public child or family
    service agency, public services for individuals
    with disabilities, public services for the
    elderly, public interest legal services
    (including prosecution or public defense), public
    library services, public school library sciences,
    or other public school-based services or teaching
    as a full-time faculty member of a Tribal
    eligible institution or university.
  • 455(m)(3)(B)

33
Loan Forgiveness for Public Service Employees (DL)
  • Trigger event date
  • The 120 payments must be made after 10/1/2007
  • 455(e)(7) and bill adds new Sec. 455(m) and 428C
    changes were made in Sec 203 of the bill

34
Grad PLUS Eligibility for Income-Contingent
Repayment
  • Grad PLUS loans are now eligible for
    Income-Contingent Repayment
  • Trigger event date
  • Requests received on or after 7/1/2009
  • 455(d)(1)(D)

35
Income Based Repayment
  • A borrower of federal loan(s) (except parent PLUS
    loans or consolidation loans used to pay parent
    PLUS loans) regardless of the disbursement dates
    of the loans with a Partial Financial Hardship
    (PFH) (payments exceed the 15 threshold
    described below) shall make payments that total
    only 15 of the result of AGI minus 150 of the
    poverty line for the family size.
  • For subsidized loans interest will be paid by
    ED for the first three years.
  • Interest will be capitalized
  • At the end of election for income-based
    repayment, or
  • When the borrower begins making payments under
    standard repayment schedule.

36
Income Based Repayment
  • Unpaid principal is deferred. Payment period can
    exceed 10 years.
  • Holder of such loan shall apply a borrowers
    payment first to interest, then fees, then
    principal
  • A borrower repaying a FFELP or Direct loan under
    income-based repayment may change to a standard
    repayment plan at any time payment period can
    exceed 10 years so new payment does not exceed
    normal standard repayment amount.

37
Income Based Repayment
  • ED will repay or cancel any outstanding balance
    of a Stafford or DL borrower (except parent PLUS
    loans or consolidation loans used to pay parent
    PLUS loans) qualifying under this section after
    25 years if the borrower had made monthly
    payments under a regular or reduced repayment
    plan or was in economic hardship deferment
  • Special Allowance is calculated on the principal
    balance on the loan and any accrued interest
    unpaid by the borrower.
  • Borrower must requalify each year.

38
Income-Based Repayment
  • Trigger event date
  • No trigger event, date 7/1/2009
  • 493C

39
Consolidation Eligibility Public Service Loan
Forgiveness
  • A borrower is eligible to consolidate into Direct
    Lending to participate in the public service loan
    forgiveness program.
  • Trigger event date
  • Consolidation application received on or after
    7/1/2008
  • 428C(b)(5)

40
Consolidation Eligibility Income Based Repayment
  • A borrower is eligible to consolidate into Direct
    Lending if the borrower is unable to obtain a
    consolidation loan from a lender with
    income-based repayment terms acceptable to the
    borrower from such a lender.
  • Trigger event date
  • Consolidation application received on or after
    7/1/2009
  • 428(c)(b)(5)

41
Re-Consolidation Public Service Loan Forgiveness
  • An individual may obtain a subsequent
    consolidation loan under the Direct Loan program
    if the borrower wishes
  • To obtain an income contingent repayment plan and
    only if the loan has been submitted for default
    aversion, or
  • To participate in the public service loan
    forgiveness program.
  • Trigger event date
  • Consolidation application received on or after
    7/1/2008
  • 482C(a)(3)(B)(i)(V) 455(g)

42
Re-Consolidation Income-Based Repayment and
Default
  • An individual may obtain a subsequent
    consolidation loan under the Direct Loan program
    if the borrower wishes
  • To obtain an income-based repayment plan and only
    if the loan has been submitted for default
    aversion or is already in default.
  • Trigger event date
  • Consolidation application received on or after
    7/1/2009
  • 428C(a)(3)(B)(i)(V) 455(g)

43
Definition of Economic Hardship
  • Definition changes from 100 of the poverty line
    for a family of two to 150 of the poverty line
    applicable to the borrowers family size.
  • Eliminates the debt burden eligibility criteria
    for full-time working borrowers (retained in the
    Final Regulations issued on 11/1/07)
  • Trigger event date
  • HRD requests granted on or after 10/1/2007
  • 435(o)

44
Elimination of Debt Burden Criterion for Economic
Hardship Deferment
  • Eliminates criterion for determining economic
    hardship that qualified a borrower if (s)he is
    working full-time and has a federal educational
    debt burden that equals or exceeds 20 of such
    borrower's adjusted gross income, and the
    difference between such borrower's AGI minus (-)
    such burden is less than 220 of the greater of
  • the annual earnings of an individual earning the
    minimum wage under section 6 of the Fair Labor
    Standards Act of 1938 or
  • the income official poverty line (as defined by
    OMB, and revised annually in accordance with
    section 673(2) of the Community Services Block
    Grant Act) applicable to a family of two.

45
Military Deferment
  • Eliminates 3-year limit. Adds 180 days after the
    demobilization date as an eligible timeframe.
    Applies to FFEL, DL and Perkins.
  • Eliminates loan origination trigger regarding
    limitation to loans made on or after July 1,
    2001. All borrowers will now be eligible.
  • Trigger event date
  • MIL requests granted on or after 10/1/2007
  • 428(b)(1)(M)(iii) 455(f)(2)(C)
    464(c)(2)(A)(iii)

46
Loan Deferment following Active Military Duty
  • Allows borrowers who are members of the National
    Guard or other Armed Forces reserve (current or
    retired members) and are called to active duty
    while enrolled (or enrolled within 6 months of
    the call to active duty) at an eligible
    institution to defer their loan for 13 months
    after completing their military service.
  • 493D(a)

47
Loan Deferment following Active Military Duty
  • For purposes of this section, active duty is
    defined as full-time duty in the active military
    service of the U.S., including State duty for
    members of the National Guard. This does not
    include active duty for training or attendance at
    a service school.
  • Trigger event date
  • MIL requests granted on or after 10/1/2007
  • 493D

48
Lender Issues
49
Reduction of Lender Special Allowance (SAP)
  • Definition of Not-for-Profit Holder
  • Eligible lender that requests a special allowance
    payment under 438(b)(2)(I)(vi)(II) and is a
  • State, or a political subdivision, authority,
    agency, or other instrumentality thereof,
    (including entities describes in section 1.103-1
    of 26 CFR or section 144(b) of the IRS code)
  • An entity described in IRS Code 150(d)(2) that
    has not elected conversion under 150(d)(3) or
    501(c)(3) or
  • A trustee acting as an eligible lender on behalf
    of such a entity
  • 438(b)(2)(I)(vi)

50
Reduction of Lender Special Allowance (SAP)
  • Trigger Event Loans first disbursed on or after
    10/1/2007
  • Amount of Special Allowance Payments will be
    based on whether or not the lender is a
    not-for-profit holder
  • A loan qualified for the special allowance
    payment that is sold to a for-profit entity or an
    otherwise ineligible not-for-profit holder shall
    thereafter be calculated under a different
    payment method.
  • 438(b)(2)(I)

51
Reduction of Lender Special Allowance (SAP)
  • For loans held by an entity other than an
    eligible not-for-profit holder
  • Stafford loans not in repayment 55 bp (basis
    points) reduction. SAP reduced from 1.74 to
    1.19
  • Stafford loans in repayment 55 bp reduction.
    SAP reduced from 2.34 to 1.79
  • PLUS loans 85 bp reduction. SAP reduced from
    2.64 to 1.79
  • Consolidation loans 55 bp reduction. SAP
    reduced from 2.64 to 2.09

52
Reduction of Lender Special Allowance (SAP)
  • For loans held by an eligible not-for-profit
    holder
  • Stafford loans not in repayment 40 bp reduction.
    SAP reduced from 1.74 to 1.34
  • Stafford loans in repayment 40 bp reduction.
    SAP reduced from 2.34 to 1.94
  • PLUS loans 70 bp reduction. SAP reduced from
    2.64 to 1.94
  • Consolidation loans 40 bp reduction. SAP
    reduced from 2.64 to 2.24

53
Elimination of Exceptional Performance Status for
Lenders
  • Strikes all provisions relating to Exceptional
    Performer status for servicers but not lenders
  • Trigger event Claims filed on or after 10/1/07.
  • Refiles will be paid on the guarantee percentage
    as of the original file date.
  • 428I, 428(c)(1), and 438(b)(5)

54
Reduction of Lender Insurance Percentage
  • Reduces the lender insurance rate from 97 to
    95.
  • Trigger event date
  • Loans first disbursed on or after 10/1/2012
  • 428(b)(1)

55
Increased Loan Fees from Lenders
  • Provides for an increase in the lender
    origination fee from 0.50 to 1.0 of the
    principal amount of the loan with respect to any
    loan made under FFELP.
  • Trigger event date
  • Loans first disbursed on or after 10/1/07
  • 438(d)

56
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Pilot program planning will start from date of
    enactment 9/27/07 through 6/30/09
  • 7/1/09 ED will arrange for the origination
    disbursement of all Parent PLUS loans using the
    auction method. Lender retains the ability to
    originate the loans until student leaves the
    school or graduates.
  • Trigger event
  • Loans made on or after 7/1/2009 to a new parent
    PLUS borrower
  • Comment As written, it appeared that the
    student has to be a new borrower.

57
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Auction held in each state with lenders competing
    every 2 years
  • Allows lenders selected to originate all FFEL
    Parent PLUS loans at all schools within a state
  • Bidding is confidential

58
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Prequalification Process for the auction will
    include
  • Borrower benefits and servicing requirements
  • Assessment of lender capacity to participate
  • Winning bids will be from the two lenders bidding
    the lowest second lowest SAP

59
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • If no one wins in a State, parent will be served
    by a lender of last resort
  • Lenders can apply to be the lender of last resort
  • The Secretary will set the SAP for a lender of
    last resort based on the lowest bid submitted in
    that State and the lowest bid submitted in a
    similar State

60
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Guarantee against default is 99
  • ED will not collect a loan fee on Parent PLUS
    loans originated through the auction pilot program

61
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Consolidation of loans in the auction process
  • Borrower needs to notify lender under this
    program of
  • Intent to consolidate with another lender
  • Terms and conditions of that other lenders loan
  • Borrower may consolidate with another lender only
    if the auction lender does not agree to match the
    terms conditions of the other lender within 10
    days of notice

62
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Addition of loans to consolidation
  • Direct loans lender must match terms
    conditions available to Direct Loan borrowers
    within 10 days
  • Parent PLUS loans lender must match terms
    conditions of lender offering loan within 10 days
  • SAP will be the lower of
  • Weighted average excluding SAP on any Direct PLUS
    loan included in consolidation
  • 3-month commercial paper rate plus 1.59

63
Pilot Program to Auction Part B (FFEL) Parent
PLUS loans
  • Addition of loans to consolidation
  • FFEL Parent PLUS loans consolidated will not be
    subject to the interest payment rebate fee
  • 499(a) and (b)

64
Definition of Eligible Not-for-Profit Holder
  • Eligible lender that requests a special allowance
    payment under 438(b)(2)(I)(vi)(II) and is a
  • State, or a political subdivision, authority,
    agency, or other instrumentality thereof,
    (including entities describes in section 1.103-1
    of 26 CFR or section 144(b) of the IRS code)
  • An entity described in IRS Code 150(d)(2) that
    has not elected conversion under 150(d)(3) or
    501(c)(3) or
  • A trustee acting as an eligible lender on behalf
    of such a entity
  • Trigger event and date
  • No trigger event, effective 10/1/07
  • 435(p)(1)

65
Definition of Eligible Not-for-Profit Holder
  • An eligible lender shall not be an eligible
    not-for-profit holder unless the lender was a
    State, a political subdivision, authority,
    agency, instrumentality, or other entity as
    described above, or that was an eligible lender
    trustee on the date of enactment.
  • 435(p)(2)

66
Definition of Eligible Not-for-Profit Holder
  • No eligible not-for-profit shall be owned or
    controlled in whole or in part by a for-profit
    entity. A not-for-profit lender is not
    considered to be owned or controlled by a
    for-profit entity if an eligible lender trustee
    only holds the loan and does not receive any
    benefits beyond reasonable and customary fees.
    The not-for-profit on whose behalf the trustee is
    acting will not be deemed owned or controlled by
    a for profit as a result of granting security
    interest in, or otherwise pledging as collateral,
    loans or the income form a loan to secure a debt
    obligation in the operation of the trustee
    relationship.
  • 435(p)(2)

67
Definition of Eligible Not-for-Profit Holder
  • An eligible not-for-profit must have been in
    operation and serving as an eligible lender on
    the date of enactment. In order for a trustee to
    be defined as an eligible not-for-profit lender,
    it must be acting on behalf of such an eligible
    lender. A State may waive this requirement for a
    new eligible not-for-profit holder that the State
    determines is necessary to fill a public purpose.
    A State may not waive any of the requirements
    related to trustees.
  • 435(p)(2)

68
Definition of Eligible Not-for-Profit Holder
  • A loan qualified for the special allowance
    payment that is sold to a for-profit entity or an
    otherwise ineligible not-for-profit holder shall
    thereafter be calculated under a different
    payment method.
  • 435(p)(3)

69
Guaranty Agency Issues
70
Guaranty Agency Collection Retention
  • Reduces Guaranty Agency collection retention from
    23 to 16
  • Trigger event date
  • Payments received on or after 10/1/2007
  • 428(c)(6)(A)

71
Account Maintenance Fees
  • Reduces Account Maintenance Fee (AMF) paid to
    guarantors from 0.10 to 0.06
  • Trigger event date
  • Payments received on or after 10/1/2007
  • 458(b)

72
Student Eligibility
73
Dependency Status
  • Independent student definition expanded to
    include
  • Students who are orphans, in foster care or a
    ward of court when 13 years of age or older
  • Students who are emancipated minors or in legal
    guardianship as determined by a court of complete
    jurisdiction in applicants state of legal
    residence
  • Students verified as unaccompanied youth who are
    homeless children or an unaccompanied youth who
    is at risk of homelessness and is also
    self-supporting.

74
Dependency Status
  • Trigger Event Date
  • Award year 2009-2010
  • 480(d)

75
Expected Family Contribution (EFC)
  • Income Protection Allowance
  • Increases in the income protection allowances for
    certain students.
  • Increases in the income protection allowances for
    independent students with dependents other than a
    spouse
  • Tables can be found in the bill
  • Trigger Event Date
  • ???? Event effective July 1 2009
  • 475(g)(2)(D)

76
Expected Family Contribution (EFC)
  • Permits a dependent student or independent
    student with dependents other than a spouse to
    qualify for zero EFC if the dependent students
    parents, or the independent student and spouse,
    if applicable, have received benefits under a
    means-tested Federal benefit program at some time
    during the prior 24 months (versus the current 12
    months).
  • Effective date 7-01-09
  • 479(b)(2)(A) 479(c)(2)

77
Expected Family Contribution (EFC)
  • Family income and zero EFC
  • Increases the family income threshold that allows
    a dependent student and an independent student
    with dependents other than a spouse to qualify
    for automatic zero EFC from 20,000 to 30,000,
    and requires ED to make annual adjustments for
    increases in the Consumer Price Index.
  • Effective date 7/1/09
  • 479(c)(1)(B)479(c)(2)(B)

78
Expected Family Contribution (EFC)
  • Dislocated workers
  • Permits a dependent student with one parent who
    is a dislocated worker to qualify for automatic
    zero EFC.
  • 479(c)(1)(A)
  • Permits an independent student with dependents
    other than a spouse to qualify for automatic zero
    EFC if the student or the students spouse, if
    applicable, is a dislocated worker.
  • 479(c)(2)(A)

79
Expected Family Contribution (EFC)
  • Untaxed income
  • Redefines untaxed income as child support,
    workmans compensation, veterans benefits
    excluding education benefits, interest on
    tax-free bonds, housing, food and other
    allowances (excluding rent subsidies for
    low-income housing) for military, clergy, and
    others (including cash payments and cash value of
    benefits) cash support or any money paid on the
    students behalf, except funds provided by a
    dependent students parents, untaxed portion of
    pensions, payments to individual retirement
    accounts and Keogh accounts excluded from income
    for tax purposes, other untaxed income and
    benefits such as Black Lung, Refugee Assistance,
    or railroad retirement benefits.
  • 480(b)

80
Expected Family Contribution (EFC)
  • Special combat pay
  • Excludes special (hazardous duty) combat pay
    from income from the need calculation that
    determines the students expected family
    contribution and from estimated financial
    assistance.
  • 480(e)(5)

81
Pell Grants
82
Pell Grants
  • Tuition sensitivity
  • Eliminates the tuition sensitivity rule
  • Trigger Event and Date
  • Award years beginning on or after 7/01/08
  • 401(b)..

83
Pell Grant
  • Annual maximum award increases
  • Mandatory funding that must supplement, not
    supplant, annual discretionary appropriations,
    for increases in the maximum authorized annual
    Pell Grant award.
  • 4,800 for award year 2008-09 (increase of 490)
  • 4,800 for award year 2009-10 (increase of 490)
  • 5,000 for award year 2010-11 (increase of 690)
  • 5,000 for award year 2011-12 (increase of 690)
  • 5,400 for award year 2012-13 (increase of
    1,090)
  • Provides for additional increases for award years
    2013 2017

84
Pell Grants
  • Trigger Event Date
  • Award years beginning on or after 7/1/08
  • 401(b)(9)(B)

85
Upward Bound
86
Upward Bound
  • Funds will be available for all Upward Bound
    projects that received assistance in FY 2006 but
    did not receive assistance in FY 2007 (other than
    new applicants) with a grant score above 70.
  • Assistance will be 4-year grants.

87
Upward Bound
  • Funding for FY 2008 through 2011 is subject to
    appropriation.
  • The authority to award grants under this
    subsection shall expire at the end of Fiscal year
    2011.
  • 402C

88
Investment in Historically Black Eligible
Institutions and Universities and Minority
Serving Institutions
89
Definition
  • Eligible Institution An institution of higher
    education is eligible to receive funds from the
    amounts made available under this section if such
    institution is
  • a part B institution (as defined in section 322)
  • a Hispanic-serving institution (as defined in
    section 502)
  • a Tribal eligible institution or University (as
    defined in section 316)
  • an Alaska Native-serving institution or a Native
    Hawaiian-serving institution (as defined in
    section 317(b))
  • a Predominantly Black Institution (as defined in
    subsection (c)
  • an Asian American and Native American Pacific
    Islander-serving institution (as defined in
    subsection (c)) or
  • a Native American-serving nontribal institution
    (as defined in subsection (c)).

90
Allocation and Allotment
  • 100,000,000 Hispanic-serving institutions
  • 100,000,000 Historically Black eligible
    institutions and Universities and Predominantly
    Black Institutions (HBCUS and PBIS)
  • 55,000,000 Other minority-serving
    institutions Tribal eligible institutions and
    Universities, Alaska Native-serving and Native
    Hawaiian-serving institutions, Asian American and
    Native American Pacific Islander-serving
    institutions, or Native American-serving
    nontribal institutions
  • Effective for fiscal years 2008 and 2009
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