Super HERA

1. SuperHERA The Higher Education Reconciliation Act is Not Your Nemesis

2. Benefits of HERA • More money for Pell eligible students • ACG for first and second year students • SMART for third and fourth year students • More Pell eligible students • Increased income maximums for auto-zero EFC and simplified needs test (SNT) • More eligibility for Federal Student Aid • Allows room and board cost in COA for less than half-time students (two consecutive, 3 total max) • Allows cost of professional licensure or certification in COA

3. Provisions • Student Eligibility, Needs Analysis and COA • ACG and SMART • Loan Issues • Institutional/Program Eligibility and R2T4

4. Student Eligibility X-Ray Vision Not Required

5. Drug Conviction Eligibility • Applicant loses eligibility for Title IV aid only if the drug-related offense for which he or she was convicted occurred while the student was receiving Title IV aid. • Student considered enrolled during winter, spring, and other breaks • Student not considered enrolled if drug offense occurs during summer break and student not attending summer school • Date of ineligibility begins on date of conviction

6. Simplified Needs Testand Auto Zero EFC • Only the parent’s tax return is considered for auto-zero EFC and SNT EFC determinations • Income criteria changed from $16,000 to $20,000

7. Means-Tested Federal Benefit Program • Alternative to Tax Return Requirement for Eligibility for Auto Zero EFC and SNT Relevant income criteria must also be met • Check the list of approved programs for 0607 in GEN-06-10 • Receipt by any member of the student’s family is considered to be a benefit received by the parent(s) of a dependent student or by the independent student • Document in student’s record how student qualified • Create self-certification statement that asks the independent student or dependent student’s parent to check the approved program from which benefits were received • Make this document required for disbursement

8. Qualified Educational Benefits • Treated as assets of the owner of the plan • Value of account at time FAFSA is completed is reported • For prepaid tuition plans, value is amount of refund for that year • Not included as an asset if the owner is a dependent student • Not included as an asset if the owner is someone whose information is not included on the FAFSA

9. Small Business Assets The family must own and control the small business Minority partners do not “own and control” the business Documentation 100% verification schools should review all schedules filed with tax returns If you have conflicting information, request corporate or partnership returns or Schedule C or CEZ.

10. Cost of Attendance • Room and Board for Students less than Half Time • Create new budget components • Insert comment in student record and/or file • Ask IS support specialist to write a script that will • Prevent insertion of the room and board budget components where they exist for the student in the two previous semesters or in any three prior semesters • Prevent adding the licensure/professional certification budget component if it exists for the student in a prior aid year • Licensure and professional certification • Obtain receipt for the student’s file • Clearly document to avoid replication

11. ACG and SMART You CAN Leap Tall Buildings in a Single Bound

12. ACG and SMART • Determine Responsibility for Implementation • Develop Implementation Procedures • Identify • Verify • Document • Develop Monitoring Process • Verify • Document

13. Loan Issues Faster than a Speeding Bullet

14. Loan Issues DISBURSEMENT REQUIREMENTS • Lights out! Dual disbursement for single term loans hits the road (well almost) • 30-day delayed delivery requirement: adieu! • Effective Feb 8, 2006 • No application required

15. Loans Loans Loans New loans…. • Grad PLUS: provisions and requirements • Who is eligible? • Do I HAVE to certify these things? • How does Grad PLUS effect aggregate loan limits?

16. Loans Loans and more Loans …..means new fees and rates!.... • 1% Federal Default Fee on FFELP loans • Combined with the 3% origination fee, does this mean PLUS borrowers will pay 4% in fees? • 3% origination fee phased out over time (currently at 2% as of July 1, 2006) • Gotta love North Carolina! • Phase out DOES NOT apply to PLUS

17. Loans are my life • New fixed rates (for loans disbursed on or after July 1, 2006): • Stafford 6.8% • PLUS 8.5% (FFELP) • Loans certified before July 1, 2006 will continue to have variable interest rate • New Stafford limits (effective July 1, 2007) • 1st year undergraduate: $3,500 (base) • 2nd year undergraduate: $4,500 (base) • Grad/Professional: $12,000 (Unsubsidized)

18. Loans (we’re almost done) • Note: No change in the aggregate loan limits • Consolidation • In-school consolidation eliminated: loansmust be in grace, repayment, deferment or forbearance • Spousal consolidation also eliminated • Single holder rule abolished

19. Program Eligibilityand R2T4 Keeping Kryptonite at Bay

20. R2T4 • Requirements Will apply to SMART/ACG; no longer apply to LEAP, SLEAP, GEAR-UP and SSS • Post-Withdraw Disbursement of Grant Funds Notification • Institution MUST notify student and get confirmation that the student still wants grant funds if grant funds disbursed directly to student…. • ….However PWD of grant funds may be credited to student’s account for outstanding charges without the notification process

21. R2T4 • Completion of more than 60% of the period • Return of Funds Within 45 days • Must returned unearned funds within 45 days after date of determination (increase from 30 to 45 days)

22. Questions What Mere Mortals Should Know

23. Contact Us • Terri LeGrand, Assistant Director of Financial Aid Wake Forest University legrante@wfu.edu (336) 758-5179 • Ben May, Assistant Director of Financial Aid Wake Forest University maybl@wfu.edu (336) 758-5181