California Association of Student Financial Aid Administrators
California Community College Student Financial Aid Administrators Association
Federal Issues Committee Joint Position Summary
March 2012
Support of HR 2117 – repeals the credit hour definition and state authorization requirement
CASFAA and CCCSFAAA thank the House of Representatives for passing H.R. 2117 and urge the Senate to follow their lead. CASFAA and CCCSFAAA agree with the following statement from the American Council on Education (ACE):
“We support efforts aimed at curbing abuse and bringing greater integrity to the federal student aid programs. However, given the almost total lack of evidence of a problem in the context of credit hour or state authorization, we see no basis for two regulations that so fundamentally alter the relationships between the federal government, states, accreditors and institutions. Ultimately, we believe these regulations invite inappropriate federal interference in campus-based decisions and will limit student access to high-quality education opportunities.”
Ability to Benefit (ATB)
CASFAA and CCCSFAAA support reinstating the ATB tests and/or the 6-degree applicable units rule as a way for students to establish eligibility for financial aid who do not possess a high school diploma or its equivalent. At a minimum, we would like this reinstated for re-entry students or dislocated workers. Blocking access to higher education for people attempting to retrain and re-enter the workforce seems contrary to the Administration’s higher education initiatives, particularly at the community colleges that are recognized as key training centers for reinvigorating the economy.
Pell Grant
CASFAA and CCCSFAAA support efforts to increase the maximum Pell Grant and efforts made this past year to maintain the current Pell maximum.
We understand the need to address the budget deficit in the Pell Grant Program that led to limiting life-time eligibility to 6 years. In many cases six years is sufficient to complete a Bachelor’s Degree. We are concerned, however, that there is no extension of eligibility for students who may need preparatory coursework including ESL and remediation prior to enrolling in degree-applicable coursework, students in high unit majors including Nursing, Engineering, other STEM fields, and other identified high need disciplines, and those returning for retooling, retraining and undergraduate degree completion due to economic factors. These students are at risk of losing Pell eligibility before they are able to complete their degrees. We support provisions for extending Pell eligibility for particular populations that may need more time who are otherwise progressing.
CASFAA and CCCSFAAA are concerned with the lack of timely consumer information required to notify institutions and students who may be near or at the lifetime maximum. We respectfully request that a Hold Harmless provision is instituted for the 2012-13 award-year for institutions who may award students Pell funds beyond the 600% limit if the Department has not provided information on the ISIR that the student is not eligible. We suggest considering a delay in implementation until the 2013-14 aid-year due to the lack of timely guidance and information for both institutions and students.
Discretionary Student Loan Limits
Student loan debt is of concern to both CASFAA and CCCSFAAA. We support the ability for institutions to establish lower loan limits to help curb student loan debt and to help students pace borrowing and provide institutions with options to better assist students address cost of attendance needs through completion of their educational program. Current regulation permits students to request annual loan maximums that may far exceed what they actually need and giving institutions flexibility in relationship to their actual costs and student demographics is an important tool for reducing student loan debt.
Award Notifications
CASFAA and CCCSFAAA do not support the concept of a model award letter that results in a “one size fits all” award notification. This approach does not meet the needs of individual institutions or their students nor does it give the institutions the flexibility to develop student-friendly web-based information in an easy to understand format. Institutions should be granted the flexibility to design award letters with appropriate elements that best serve their students. For example, the information a first generation student may need on a community college award letter is different than what may be relevant to a graduate student applying to law school. We agree that there should be certain elements (name of institution, Cost of Attendance, fulltime award eligibility, etc.).
Cohort Default Rate (CDR) Low Participation Rate Exemption or Waiver
Currently, institutions that exceed the student loan Cohort Default Rate (CDR) limits set in legislation may lose eligibility to participate in the Pell Grant and Direct Loan programs. Because a high default rate is seen as indicative of a “bad” school, institutions that have relatively few borrowers and have high CDRs are provided with relied from sanctions through and appeal process which results in an automatic approval by the US Department of Education. Current statute requires than an annual cohort default rate is calculated and published for all Title IV institutions. The appeal process requires institutions to report data on each individual borrower as part of the appeal followed by a subsequent review by the Department of Education after which the appeal approval is granted. CASFAA and CCCSFAAA think this presents an unnecessary workload for both the institution and Department and request legislation that changes the requirement for an annual published calculation for institutions that meet the low participation rate definition. If legislative change is not supported, then at minimum, we recommend a technical amendment that increases the percentage of the sanction thresholds to be more aligned with the CDR projected percentage increases based on the additional third year calculation, requires the published annual CDR to flag low participation rate institutions, and the “automatic” appeal is “automatic” and does not require any action by the institution to exclude it from sanctions should its published CDR exceed the sanction threshold.
Regulatory Burden
As regulations have increased over the past several years, the cost and administrative burden to colleges has also increased. In some cases, the regulations are duplicative. For example, the requirement that colleges have a Net Price Calculator on their website duplicates the information available to families through the FAFSA4caster on the FAFSA website. Last year, the Advisory Committee on Student Financial Assistance conducted a regulatory burden study and provided its findings and recommendations to both Congress and the US Department of Education. We urge Congress to review and accept those recommendations.
Additionally, CASFAA and CCCSFAAA request that segmental specific regulations are considered when appropriate so legislative action is focused rather than creating additional burden for those segments that may not have applicable issues given the nature of the regulatory change under review.
Federal Work Study
CASFAA and CCCSFAAA support the President’s proposal to increase Federal Work Study but are concerned that additional fund use may be limited to specific fields and recommend that institutions are allowed to make the most appropriate job placements for their students.
Direct Loan Interest Rate
We support the President’s proposal to reduce the interest rate on subsidized loans. Currently, the prime lending rate is below 2% but the interest on student loans is 6.8%. High interest rates provide an incentive for students to forego the Direct Lending program and borrow private loans that do not carry the consumer protections that federal loans have.
Adopted by CASFAA and CCCSFAAA Federal Issues Committees
March XX, 2012