NASFAA's National Conference concluded Wednesday morning with a broad update from the U.S. Department of Education on the many new laws, regulations and pending legislation.
Note: A webcast of this update and the slide presentation that accompanied it will be posted to the NASFAA Web site in the near future.
With the gavel officially passed from 2007-08 National Chair Michael Bennett to the 2008-09 National Chair David Gruen, director of Student Financial Aid at the University of Wyoming, Bennett assumed he could relax. However, NASFAA President and CEO Dr. Phil Day notified Bennett that NASFAA would call on him to stay active.
Members were notified that during the course of this year's National Conference attendees contributed $2,600, 40 sets of pajamas and 20 books to the conference's designated charity, the Pajama Program, a not-for-profit organization that provides warm pajamas and books to children of need around the world.
ED Update
The Department's Director of the Forecasting and Policy Analysis Staff at the Office of Postsecondary Education Dan Madzelan began by thanking members. He said he appreciated having the opportunity to talk to financial aid administrators - not just during sessions but also informally between and after sessions.
Madzelan then provided a broad overview of the 2009 annual budget process, Department efforts to prevent a disruption in FFELP loans through the Ensuring Continued Access to Student Loan Act (ECASLA), recent regulations and actions stemming from the Higher Education Reconciliation Act (HERA) and the College Cost Reduction Act (CCRAA), and the pending HEA reauthorization bill.
Regarding the annual budget, Madzelan highlighted proposals by President Bush and Congress to increase Pell Grant spending. However unlike Congress, the Bush administration has proposed eliminating funding for FSEOG, LEAP and Perkins Loans to consolidate funding into Pell Grants. He said that the Bush administration's hope was to recall the Perkins revolving fund and put that money to better use. The comment drew grumbles from attendees.
He also noted that roughly $520 million appropriated for ACG/SMART went unused and was rescinded. These funds were used to pay for the Pell Grant shortfall.
Regarding ECASLA, Madzelan said that Congress and the Department had moved at warp speed to implement measures to provide financing to banks and FFEL providers. He said the compensation provided to banks through ECASLA was pretty fair - especially when compared to current market rates and the cost of accessing liquidity.
The Department's Director of Federal Student Aid Jeff Baker provided some additional insight into ECASLA, the TEACH Grant program, changes to ACG/SMART made by ECASLA and the Department's enforcement activities related to the Federal Work Study (FWS) program.
Regarding ECASLA, Baker said that since the Department has published rules on the Department's authority to purchase loans there has been a loosening of the once constricted student loan market. He also noted that much of the troubles in the student loan market were caused by other problems in the credit market and were unrelated to student loans, which remain a solid investment.
Baker commended Congress for making important changes to ACG/SMART through ECASLA, but also recognized the difficulty financial aid offices would face when trying to implement these changes in January 2009 - the middle of the award year. He explained that Congress chose that implementation date for budgetary reasons, but there was a possibility Congress would provide some provisions in the HEA bill to make it easier for financial aid offices to implement ACG/SMART changes mid-year.
Regarding the TEACH Grant program, Baker noted that the program became effective July 1 and currently 189 schools have applied to participate. He expressed hope that all institutions would eventually join, but noted that institutions would not be forced to participate.
Baker concluded by warning schools that the Department would be enforcing the community service requirement for Federal Work Study. Institutions must spend at least seven percent of their FWS federal contribution as compensation to FWS students employed in community service activities. In addition, each institution must also have at least one reading tutoring for children or family literacy project.
Baker said that the Department would be enforcing this and institutions would be subject to fines and penalties. Institutions have a month to return funds to the Department to avoid being penalized. The Department will redistribute these funds to other schools.
By Haley Chitty
NASFAA Assistant Director of Communications
Posted 07/10/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.
