New Era of Accountability Diane Auer Jones Assistant Secretary for Postsecondary Education

1. New Era of Accountability Diane Auer Jones Assistant Secretary for Postsecondary Education U.S. Department of Education

2. Restoring Confidence • Federal Student Aid Programs • Borrower Benefits/Choice • Transparency • Compliance • Financial Aid Administrators • FFEL Lenders and Guarantee Agencies • Department of Education

3. College Attendance Rates

4. College Prices TF TFRB TFRB Source: College Board T (tuition); F (fees); R (room); B (board)

5. Helping Students MakeInformed Choices • FAFSA4Caster • College Navigator • FIPSE Student Achievement and Institutional Performance Pilot Project • AAC&U, ASCU, & NASULGC

6. Federal Student Aid * Estimate

7. Pell Grant Maximum Awards 2000-2012 Fiscal YearAward YearAuthorizedAppropriated 2000 2000-01 $4,800 $3,300 2001 2001-02 $5,100 $3,750 2002 2002-03 $5,400 $4,000 2003 2003-04 $5,800 $4,050 2004 2004-05 $5,800 $4,050 2005 2005-06 $5,800 $4,050 2006 2006-07 $5,800 $4,050 2007 2007-08 $5,800 $4,310 2008 2008-09 -------- + $490 2009 2009-10 -------- + $490 2010 2010-11 -------- + $690 2011 2011-12 -------- + $690 2012 2012-13 -------- +1,090

8. Academic Competitiveness Grants • Pell Grant Eligible Enrolled Full-Time & U.S. Citizen • Rigorous Secondary School Program of Study • Recognized State-submitted programs; or • Courses similar to State Scholars Initiative; or • 2 AP Courses with test score of 3 or better; or • 2 IB Courses with test score of 4 or better • Award Size: $750/$1300 • 2006: • $233,038,410 awarded to 299,089 students http://www.ed.gov/admins/finaid/about/ac-smart/state-programs06.html • http://www.ed.gov/admins/finaid/about/ac-smart/2007/state-programs-07.html

9. Academic Competitiveness Grants • Innovative Strategies to Identify Eligible Students: • Institutions and states can establish a branded core curriculum for college admissions. • Example: The University of California’s A-G coursework requirements for Admissions are well-known by high schools students throughout the State and constitute an ACG-approved course of study. • The state can certify AC Grant eligibility by sending to postsecondary institutions reports listing eligible students. • Example: Students in the State of Florida who have completed the ACG-approved curriculum are eligible to receive the Bright Futures Scholarship. Florida sends universities the names of Bright Futures recipients. • Institutions can reach out to all Pell Grant recipients, not just students who self-identify as eligible. • Example: Brigham Young University, Idaho, contacted all students who self-certified on their FAFSA as well as other students who appeared to be potentially eligible based on a review of transcripts and financial aid records.

10. National SMART Grants Eligibility: Pell Grant Eligible Enrolled Full-Time & U.S. Citizen 3rd and 4th year college students enrolled in and making progress toward a degree in STEM or Critical Needs Foreign Language; GPA 3.0 or better. Award Size: $4000 2006 - $195,544,735 awarded to 60,976 students Changes Additional SMART Majors added Enrollment requirements clarified

11. Institutional Aid $ thousands

12. State Aid $ thousands

13. Federal Student Loan Volume (FFEL & Direct Loans) $ millions

14. Average Federal Student Loan Debt Undergraduate students with a 4-Year Degree (Percent of students borrowing) 66% 62% 58% 40%

15. Average Federal Student Loan Debt Monthly Payment $411 Monthly Payment $207

16. Student Loans • Stafford/Unsubsidized Stafford/PLUS • Direct Loans/FFEL • Competition yields better borrower benefits • Private Loans • Fill gap above Federal Student Loan limits • Should not displace grant aid or Federal loans • Marketing Practices • Dept. of Education - Interagency Group • Ombudsman • 877-557-2575 (borrowers) • 202-377-3800 (Financial aid professionals)

17. National Student Loan Cohort DefaultRates 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Percentage Presenter Name(s) 4.6

18. Ripped from the Headlines Lenders Misusing Student Database Improper Searches Raise Privacy Fears Swimming With Student Loan Sharks University named in report detailing student loan abuse Panel Finds Wide Abuse in Student Loan Program Rules proposed to curb loan abuse

19. Compliance Dear Colleague Letters Negotiated Rulemaking – Began in 2006 Publication of Final Rule – Nov. 1, 2007

20. College Cost Reduction & Access Act Changes Affecting FFEL Lenders and Guaranty Agencies • Effective October 1, 2007 -- • Reduced: • FFEL guaranty agency retention percentage from 23% to 16%. • FFEL lender special allowance payments (SAP) by 55 basis points (40 for non-profit lenders). • GA account maintenance fee from .10% to .06% • Increased lender loan fee from .50% to 1.0%. • Eliminated Exceptional Performer Designation for FFEL lenders, servicers, and guaranty agencies.

21. College Cost Reduction & Access Act Increased Pell Grants TEACH Grants* Loan Forgiveness for Public Service Employees* PLUS Auction Pilot College Access Challenge Grants * - Requires negotiated rulemaking

22. College Cost Reduction & Access Act • Negotiated Rulemaking • Regional Hearings: • 11/2 (LA); 11/14 (DC); 11/29 (CA) • Nominations: November 29, 2007 • Target Dates: • TEACH: Publication (6/1/08) and Implementation (7/1/08*) • FULL PACKAGE: Publication (11/1/08) and Implementation (7/1/09)

23. HEA Reauthorization?

24. Thank you!