NASFAA Conference Notes

A Conversation with Senate Education Committee Staff

Their priorities are:

• Campus Safety (Jeanne Clery Act)
• Simplification
• Common definitions/terms for Financial Aid Award Notifications
• Accountability and Outcomes

They also feel that the Net Price Calculator is very important. But, they also feel that the total program price is important rather than just one academic year.

They want to streamline Title IV programs and make sure they reach the students who are most needy.

They are having numerous conversations on Title IV eligibility for short-term programs.

Quick Steps to Avoid Tripping Over Compliance

Incentive Compensation could be part of a borrower defense claim. Campuses should make sure they are not violating the incentive compensation prohibition.

Verification should be a priority. In discussing this, the consensus was that we should not be responsible for reporting tax fraud such as incorrect filing status where they refuse to amend tax returns.

Schools should be reviewing their SAP policies regularly and should pay attention to programs that may have higher GPA requirements than other programs. For example, a program requires a 3.0 GPA rather than the standard 2.0 for all other programs.

Many schools have inadequate R2T4 policies. This is a requirement and schools need to ensure they are providing all required information.

For non-attendance taking schools, they should ensure that an academic department is not requiring the instructors in that department to take attendance. That would make the programs in that particular academic department attendance-taking. For example, an academic department has a policy that 3 absences require a reduction in the maximum grade for a class (example, if the student is absent 3 times, s/he can only earn a B at most). This would make that program an attendance taking program since that would be the only way to monitor these absences. If the instructor made this decision on his own, it does not make it attendance taking. It is only if the school or a particular academic department chair requires the instructors to take attendance. Schools should ensure that all academic departments understand how attendance and nonattendance taking impacts Title IV.

Schools should review existing consortium agreements and make sure they have these on hand and that they are complete. Many schools have agreements that have been in place for many years. They should review these on a regular basis.

SARA does not cover the school for the state in which you have a physical presence.

FWS Job Descriptions are deficient. Schools should ensure that all job descriptions are maintained and have all necessary elements.

Monitor your consumer information materials at least annually. Additionally, you should maintain all consumer information documents in one place in your office so you can easily provide those to an auditor or program reviewer.

Campus Security should be a campus-wide effort and involve members of all departments. Violations can result in expensive fines. The school should have a campus team that reviews the campus security policy regularly for compliance.

Data Security – schools should conduct campus-wide data security training for all employees. Schools can be fined for security breaches.

What Financial Aid Administrators Need to Know About Cybersecurity

ED is working with others to develop a single definition of a breach. This will eliminate confusion on whether or not a breach has occurred.

Schools must develop, implement and maintain documented data security programs and designate an employee to coordinate that program.

ED monitors media reports on breaches involving schools and determines if the school has already reported it to ED. They want to be made aware as soon as possible rather than finding out in the news that a breach has occurred.

If a school experiences a breach, ED will work with them on best practices in an effort to prevent future breaches.

ED’s Security Operations Center (EDSOC) is available 24 hours a day. Schools can reach out to ED to discuss a potential breach if they are not sure it constitutes a reportable breach. If it is not something that impacts Title IV, they do not get involved but will still assist schools. (Example was a breach of the library – student ID numbers were breached – this was not a data breach for Title IV purposes but they still assisted the school with best practices).

Human error is the top threat.

Some schools have moved to 2-factor authentication.

Most of us are utilizing the cloud. ED’s Next Generation is also moving toward utilizing the cloud.

It is important to educate all employees and students on cybersecurity.

Schools should enforce safe password practices – longer passwords; do not use the same one for everything; do not write them down where someone can find them; storing them in your phone can be dangerous; etc.

It is very important that everyone is using anti-virus/anti-malware software.

For information or guidance, use ED’s cybersecurity site at https://ifap.ed.gov/eannouncements/Cyber.html

NASFAA Strategic Planning

There have been discussions on eliminating PLUS loans.

It was suggested that NASFAA offer training geared towards admissions, business office, etc. and their roles that impact Title IV.

Risk sharing agreements have been discussed but these can also have very negative consequences. It may result in being more selective in admissions.

NASFAA has just approved a new position for state-based aid advocacy to supplement existing advocacy efforts related to state aid issues.

NASFAA works as a partnership with all associations/groups for advocacy (strength in numbers).

It is important that schools provide the necessary resources to Financial Aid departments to prevent administrative capability issues.

Federal Update

Borrower Defense to Repayment and GE Final Rules should be out soon {GE final rules were actually published 7/1/19}.

In the recent negotiated rulemaking ED elected to split this into 3 proposed rules federal registers. The first was on Accreditation which was recently issued. The remaining two will be Distance Learning and Teach/Faith-based issues.

ED reminded us of the foreign gift reporting. ED should issue guidance in the near future regarding this topic.

Children of Fallen Heroes – the school determines the student has met the qualifications. There is not a federal match for this (see 11/11/18 electronic announcement).

2019-2020 auto zero EFC income threshold increased from $25,000 to $26,000.

6/14/19 publication discusses best practices for financial literacy and education at institutions of higher education. Several schools discussed referring this to something else besides literacy so as not to offend students. Several schools conducted classes on this but referred to it using other terms so students did not think they were being referred to as illiterate.

Administering Disbursements

The disbursement date in COD must be actual date of disbursement to the student or it will be a finding.

Grant funds as a late disbursement or PWD must be made within 180 days if posted to the student’s account.

For regaining eligibility purposes related to SAP, loans can only begin with the payment period in which SAP was met. It cannot be awarded for the entire academic year if that encompasses periods in which SAP was not being met.

ED has established an “ask a fed” email address to assist schools with questions. This was done as a result of the popularity of Ask a Fed at the conferences. The email address is askafed@ed.gov and this email box is monitored by ED’s Training Officers.

Open Forum

Data sharing – this expires at next reauthorization. The new reauthorization should have a permanent resolution on this issue.

Both the House and Senate are working toward Reauthorization. We should know by fall if we will have a total Reauthorization or if it will be piecemeal bills until Reauthorization occurs.

Loan pro-ration is not in any bills yet but it is one of NASFAA’s recommended issues for Reauthorization. This is primarily geared toward pro-rating loans for those that only attend part-time.

ED is expected to issue guidance soon on foreign aid reporting.

Activity in Congress may result in a standardized award notice. This could be specific down to the font size and specific terms that must be used. Most likely we will see something on award notifications (award letters) in Reauthorization. They clarified that ED’s most recent guidance on award letters issued a few months ago is not binding. Rather, it was just recommendations.

There have been a lot of discussions regarding income share agreements (this was a hot topic at this year’s conference). Senator Warren has already requested information from ED on this topic and has also requested information from schools that currently participate in income sharing agreements.

GE – NASFAA is hoping the new GE final rules will offer early implementation {the final rules were issued 7/1/19 and did offer early implementation}.

There has been a lot of momentum in eliminating loan origination fees. It looks pretty promising that something on this issue will be in Reauthorization.

One idea regarding award notifications (award letters) that was suggested by a school was to use “billable costs” instead of “direct costs” so students have a better understanding that these are the charges for which the school will bill the student.

FAFSA Update

In July 2019 we will see 3 changes – 1) myfafsa checklist views now show what role (student or parent) the user is logged in as; 2) myfafsa checklist provides guidance regarding student aid next steps; and 3) push notifications are now enabled.

For 2019-2020 over 50% of applicants utilized IRS DRT.
2020-2021 FAFSA is being updated to reflect the new tax forms.

Children of Fallen Heroes Scholarship – beginning with the 2020-2021 award year, these will be reported using FAA Access rather than COD.

This will set a flag that carries over year after year once it has been reported. The flag will alert all schools receiving that student’s ISIR that they qualify for this.

In 2020-2021, the SAR will be available in mystudentaid.

Potential Enhancements for the Future:

• Tracking of mobile app submissions (currently they show as submitted on the web so you cannot tell which students did it on a computer vs. those that used a mobile device).
• Availability of limited corrections using mobile device (at this time, this has a low probability of being implemented).
• IRS DRT becoming more mobile responsive. The FAFSA has already been made mobile responsive but IRS DRT is not. ED hopes this will change by 10/01/19.

Verification

2020-2021 has the same verification groups. The suggested text will be published later this year.

For 2020-2021, filers who have a tax filing extension are no longer required to submit a copy of the 4868.

Verification of nonfiling status will continue to be required for those who will not file as well as those having a tax filing extension beyond the automatic 6-month extension.

IRS DRT will function the same way in that information is masked and only the FAA can make corrections to these data items (rollovers are exception during the FAFSA process).

Reporting verification results for Groups V4 and V5 will still apply. Be sure to select the proper award year for which you are providing results.

Students can still be reassigned to a new verification group (V1 or V4 can be reassigned to V5).

Tax filers will not be required to prove their answer to whether or not they filed a Schedule 1. This is used to determine if they are eligible for auto zero EFC or simplified needs test. This will work the same as the previous question on whether they were eligible to file a 1040A or 1040EZ.

A question was posed during this session regarding the use of paper returns which will be acceptable for 2020-2021. If the student has a rollover, will a preparer’s signature on the tax return be acceptable or must it be signed by the tax filer since a rollover is noted. ED was going to take this back for further review.

Comment Codes 400 and 401 will continue for 2020-2021.

There appears to have been an issue with ISIRs not going to the school for applicants that applied at the end of October. Several schools indicated they had discovered this issue. Misty Parker was in this session and indicated that ED was not aware of any problems. But she asked a school to provide specific students and they will research to see if there is any problem.

NASFAA Inside the Beltway

Risk sharing seems to be a recurring theme in Congress. They believe that schools should have skin in the game. However, this fails to take into account the investments and risks schools already have.

We will likely have some form of risk sharing in reauthorization