Monday, August 27, 2012

NSLDS and the PELL Lifetime Limit

Back when Congress finally agreed on how much the 2012-13 Pell Grant would be, they had to cut some corners in other areas in order to maintain the amount. One of the corners that was cut was the Lifetime Limit of Pell a student could receive.

The Lifetime Limit is exactly what it sounds like: the total amount of Pell Grant a person could receive in their lifetime. This limit isn't based on a dollar amount, but instead a percentage amount. Before July 1, the lifetime percentage was 900% (or 18 semesters/24 quarters). During the short time when more than 100% could be received (called a 'year-round pell'), that extra is figured into the lifetime eligibility also.

The unusual thing about the lifetime eligibility is that since it's based on percentage, if you could only receive a $500 pell for the year, and the maximum that year was $4700, and if all $500 came in, then you were at 100%. This is the confusing part of this rule, but it tries to ensure that even though the amounts may not be the same for every student, the number of times you can receive pell is the same. If you applied for pell and weren't eligible, then your pell percentage would be 0% for that year. Keep in mind, they only count pell that actually was disbursed. Also keep in mind that unless 100% of your yearly pell came in for a year, then it's somewhat rare that your pell will be an even percentage; some who have withdrawn, were in shorter payment periods could, or were attending a clock hour program could have strange amounts like 37.061% of 67.776%.

So now that we're passed the July 1 change of rules, the Lifetime Limit for pells has been reduced to 600% (or 12 semesters/18 quarters). The rule is also effective immediately and no one is grandfathered in. This is difficult to keep track of because NSLDS doesn't always calculate the total percentages. However, it's actually worse than that: NSLDS doesn't keep track of the entire Pell Grant history! It only goes back so far. So this means that there are students were are being denied Pell Grants or having Pell Grants reduced because of hitting this threshhold but the schools aren't knowing how close the students actually are.

For the FA Administrators, to get a complete understanding of how much Pell Grant a student has had in their lifetime, you have to look on COD for the most accurate information.

For the students, please let your FA people know if you went to school longer than what shows on NSLDS. This is help to avoid the FA office being left in the dark and help to give you the most accurate information.

NSLDS is still a fabulous resource and a great tool, but when it comes to Pell Grants, it's not as effective as it is for loans.

Monday, August 20, 2012

What If? Scenario 4

What if I am owed excess funds from my Financial Aid? Why can't I pick it up on a day I don't attend?

This is a very simple answer. You must be in school and currently attending classes to receive your excess funds. If you normally pick up your check on Thursday, but you are absent Thursday, then you have to wait for your next day of attendance to pick it up. You are not in school and attending if you miss that day.

The reason for this rule is because if your last day of attendance is Wednesday, and you pick up a check Thursday, and you drop out on Friday, then you weren't entitled to that money. Your account summary will show you received funds after your last day of attendance, and you will most likely owe most (if not all) of that money back (depending on how far through the payment period you are). The school is then in serious trouble with the Dept of Ed for giving you money you weren't entitled to. Like I said above, you have to be in school and attending, and just because you received the money before you dropped, you weren't actually attending.

Schools aren't in business to give students money (after all, the money is more often than not a loan which the student has to repay), they are in business to give knowledge to students. The rules involving the money is taking into account the academic side. I've had students call and ask if they could pick up their check, and the student would be asked why they weren't at school that day. The most common answer is that they were sick. Because of the rules of the Dept of Ed, schools have to take the stance of "if you're too sick for class, then you're too sick for your check." You have to be able to be marked present for some time in the day when your check is available or else no one can prove that you were actually attending that day.

Once again, rules are rules, and this isn't one that can really bend.

Monday, August 13, 2012

The Temporary Fate of Gainful Employment

This posting is more for the FA administrators than anyone else. There has been a lot of talk lately as to what is and isn't still required, and there seems to be confusing answers that seem to contradict what's out there. So, what's really going on?

There are four main points to discuss: disclosures, reporting, new programs, and the metrics.

1. The Metrics. These were a series of figures that came out from the Dept this year for the first time. They were based partly on the massive report (explained below) from last October/November and partly on information from the Social Security Administration. This information translated to if a school was meeting expectations on three areas for programs: repayment rate and two debt-to-earnings ratios. If a school failed all three for three out of four years, then they would lose Title IV eligibility for that program (failures once and twice had varying degrees of severity and sanctions). The court ruling in June stated that the Dept had failed to accurately define where their rates came from. For example, the court didn't understand where the students' payments couldn't be above 30% of their discretionary income. In other words, the rates seemed to have been picked simply for the sake of knowing that roughly 25% of schools couldn't pass these rates chosen, as opposed to any actual evidence of why these rates were beneficial. So the Metrics were thrown out as being legal.

2. The Report. Beginning last year, schools had to submit a massive report each October with information on the previous year's student's enrollments (last year's actually dated back five years). This massive report wanted to know things like name, SSN, enrollment dates, enrollment status at the end of the year, and information of what happened to the student after they left school. If schools didn't have any kind of a computerized database, this turned into a disaster to complete. The purpose of this report was to partially create the metrics, but since the metrics were thrown out, so was the report.

3. New Programs. Another component of the rules was the new programs rule. The fear from the Dept was that schools would create a new program that was identical to a failing program, so to stop this, schools had to jump through all sorts of new hoops for programs to be approved. Part of this included having to submit the program information to the Dept at least 90 days before the first day of the new program (and this had to be after the program had obtained approval from the accrediting agency). Since there won't be failing programs, then there is no need for this part of the rule, so this was thrown out.

4. The Disclosures. The judge ruled that the wording of 'gainful employment' in the original HEA of 1965 was vague enough that the Dept could make rules on the gainful employment of schools, so a requirement to disclose information about those programs was within the rights of the Dept. So the disclosures part of the rule was upheld, and schools still have to disclose information about the programs, such as on-time graduation rate, placement rate, median loan debt, SOC codes for potential jobs, etc.

The future of the Gainful Employment rules are up in the air for the time being. The Dept has 60 days from the date of the ruling to appeal, which would be the end of August. However, it is expected that the Dept won't appeal and instead focus more on re-creating the rules for next year or the year after. It is generally agreed that a lot of the future of the rules depend a lot on who is elected President. We will see what the future holds!

Monday, August 6, 2012

Reminiscing of the FA Office

The greatest thing about having a blog is the interaction that comes with it, and the greatest joy one can hear in life in general is to know that you've made a difference in someone's life.

When I was in the FA office everyday, I saw that first hand. I would meet students who had been on their own since they were sixteen, who had several children, who made a life for themselves without any help from mom and dad, other family members, or anyone else. I'd met some remarkable people that made me take a look at myself and think "You know, life's not that bad." There were some amazing people that I had the great fortune of helping navigate through the murky waters of FA, and in return they helped me to appreciate everything that I'd taken for granted.

Unfortunately, I don't get to see these students on a regular basis anymore, nor do I have the fortune of being able to directly help these remarkable people as I once did. They were stressful days, I won't lie. I remember being at graduations watching these same students (who I ended up looking up to as inspirations) completely ignore me and instead talk to their teachers and their admissions reps. And I was fine with it. After all, I was the FA person; I was the person who always needed something signed; I was the person who needed to send something in and had to inconvenience them to get the paperwork done; I was the one who more often than not had bad news. Well, at least that's the reputation that FA people have. But I was fine with it, like I said, because I knew that I was helping these students in ways they wouldn't realize yet, if they ever did.

And as I'd stand off to the side at graduations and reminisce on the students that I'd never see again, I may only have one of them talk to me and thank me for helping them. It may have been the student that I'd stayed late for on a night that I didn't have to, putting aside my own personal life for the student who'd no-showed me a couple times before, or it may have been the student that always had their paperwork completed on-time and flawlessly. Either way, that one student would always make up for everything else. People would often ask why someone stays in the FA business since there always seems to be bad news, changing rules, and stress without end. My response is always "for that one student who realizes".

No one seems to go into the FA industry on purpose: it always seems like an accident. After all, who ever hears of a child who says "I want to grow up to work in Financial Aid!" Everyone has their reason for getting into the industry, but I will say this: everyone that seems to get into it seems to last a long time in it. And that one student who says "thank you" is all it takes to continue for another year.