MDHE Digest Newsletter - November 2009

Department of Higher Education
MDHE Digest Online
Printable Version
November 2009

Changes to Bright Flight for 2010-2011

The high school graduating class of 2010 will see changes to the Bright Flight program when entering college next fall. Beginning with the 2010-2011 collegiate academic year, the maximum allowable annual award will increase for students in the top 3 percent of Missouri students taking either the ACT or SAT assessment test, and students scoring in the top fourth and fifth percentiles of those tests will become eligible for an award.

Specifically, for the 2010-2011 academic year, the top 3 percent includes those students with an ACT score of 31 or SAT scores of 790 on the math section and 800 on the critical reading section. Students earning these scores will qualify for an annual award of up to $3,000. The actual award amount is dependent on the amount of funds allocated for the program during the 2010 legislative session. This award level differs from the one included in the FY 2011 budget request approved by the Coordinating Board for Higher Education in September 2009.

To qualify in the top 4th and 5th percentile, students must score a 30 on the ACT or a 780 in math and 770 in critical reading on the SAT. Students in this category may receive an annual award of up to $1,000. Award amounts, and the availability of the award for students scoring at this level, are subject to change based on the amount of funds allocated for the program in the 2010 legislative session. The Missouri Department of Higher Education will continue to provide additional information about award amounts and the implementation of these changes as it becomes available.

These changes to the Bright Flight program are a result of Senate Bill 389, the omnibus higher education bill signed into law during the 2007 legislative session.

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Recertification of Institutional Eligibility to Participate in State Aid Programs

Every three years, institutions participating in the Missouri Department of Higher Education's (MDHE) state student financial assistance programs are required to recertify their eligibility for continued participation. The last recertification process occurred in February 2006 and was originally scheduled to occur again in February 2009. However, with the implementation of the Access Missouri Financial Assistance program in August 2007, the recertification schedule was revised to coincide with the September 2007 effective date of administrative rule 6 CSR 10-2.140, Institutional Eligibility for Student Participation. As a result, recertification is now scheduled to be completed by September 2010, three years from the effective date of the administrative rule.

Recertification materials were mailed to participating institutions earlier this month. As there have been recent changes to several of the administrative rules, as well as the addition of several new programs to the MDHE's portfolio of state student financial assistance programs, all institutions will be required to complete new participation agreements for each program in which they wish to participate, including those in which they are currently participating.

The recertification process will provide institutions the opportunity to reaffirm their current portfolio of programs, add new programs to it, or remove programs from it. Although participation in a recertified institution's existing programs will continue uninterrupted into the 2010-2011 academic year, participation in any new programs added to an institution's portfolio will begin with the 2011-2012 academic year to ensure smooth and accurate award processing each year.

The completed recertification applications are due Feb. 1, 2010. The MDHE will submit the applications to the Coordinating Board for Higher Education for approval at its June 2010 meeting to ensure recertification is complete before the September 2010 deadline.

National News

By Robert Powell, MDHE Policy Analyst

A brief summary of financial aid related national news items is listed here, along with links for further information.

Final Regulations issued by the Department of Education

During the last week of October, the U.S. Department of Education issued four sets of final rules for the Student Assistance Programs authorized under Title IV of the Higher Education Act. These regulations implement recent statutory changes to the Higher Education Act made by the Higher Education Opportunity Act and other recent legislation and is the result of the recent negotiated rulemaking committees and proposed rules issued this summer. Unless otherwise stated, these rules go into effect on July 1, 2010.

Final Rule - General and Non-Loan Programmatic Issues

Final Rule - Perkins, FFEL, and Direct Loan Programs

Final Rule - Institutions and Lender Requirements Relating to the Title IV Student Loan Programs

Final Rule - Institutional Eligibility and the Secretary's Recognition of Accrediting Agencies

There were a number of changes made to the final regulations based on comments received on the proposed rules. Some notable changes were made to the Pell regulations regarding awarding a second Pell award and how to handle transfer students and crossover periods. The Pell changes can be found in the General and Non-Loan Issues Final Rule.

Guidance on the Iraq and Afghanistan Service Grant

On Nov. 6, 2009, the U.S. Department of Education (USDE) issued operational guidance regarding increased Title IV aid for students whose parent died as a result of military service in Iraq or Afghanistan after Sept. 11, 2001.

Beginning in December or January, the USDE will be conducting a match between FAFSA filers and Department of Defense records to determine possible eligible students. They will then contact the student and schools listed on the FAFSA regarding possible increased aid eligibility.

Recent Publications

The Department of Education has recently issued the following publications for the upcoming 2010-2011 Award Year.

2010-2011 SAR Comment Codes and Text Guide

2010-2011 Expected Family Contribution (EFC) Formula Guide

2010-2011 ISIR Guide

2010-2011 School Electronic Process Guide

2010-2011 Student Web Application Products Process Guide

2010-2011 Summary of Changes for the Application Processing System Guide

In the spotlight: Default Prevention Grant School, Jefferson College

Default prevention efforts are often viewed as duties carried out by the financial aid office. However, schools that experience success in their efforts have found that collaboration is the key when it comes to decreasing Cohort Default Rates (CDRs). Jefferson College (JC) has worked hard through the years to build a campus-wide default prevention and retention program, which is driven by initiatives that educate student-borrowers on the importance of repaying student loans. As a result, JC has experienced the following success within its default prevention and retention program:

• 2007 cohort default rate of 6.9 percent (down from 9.8 percent in 2006)
• $243,000 decrease in default claims from 2007 to 2008

Financial literacy programs are promoted within academic courses, in the campus apartments, and for certain target student populations, such as nursing students. These programs include a pre- and post-survey/quiz to help determine if students improve their financial literacy knowledge as a result of their participation.

Workshops for financial aid recipients experiencing mid-term difficulties are held at convenient times and locations each semester. Students who attend the workshops are tracked and their academic progress is monitored at the end of the semester.

The College is also committed to retention and student success at all levels and within all offices - those which provide direct services to students and those with more a more peripheral impact. This commitment to success intertwines consistently and cohesively with loan default prevention. Activities utilize staff and resources from: Admissions, Financial Aid, Advising and Retention Center, Business Office, Dean of Students Office, Campus Housing, Athletic Department, and Academics.

Relationships formed with numerous programs and services already in existence on the JC campus aid in supplementing the loan default prevention efforts initiated within the MDHE's Default Prevention Grant.

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Be Realistic about Holiday Expenses: Economic Tidbit courtesy of the
MDHE Default Prevention Team

Are you looking for more than one way to curb your spending before it gets out of control this holiday season? If you answered "yes" to this question, Jason Alderman, director of Practical Money Skills for Visa Incorporated, offers the following advice to help you stay on top of the gift-giving game.

When I was a kid, Christmas club savings accounts were quite common. Like their close cousin, the layaway plan, these accounts encouraged people to start saving far in advance for expenses they knew were coming.

In these tough economic times, a return to savings methods that worked so well for our parents might not be a bad idea. The basic fundamentals they understood included knowing what things really cost (including taxes and finance charges), prioritizing your expenses, and being willing to postpone or forgo purchases that will upset your overall budget.

The holidays are the most challenging time of year to curtail spending, thanks to long gift lists, frantic last-minute shopping and higher-than-usual travel and entertainment expenses. Here are a few tips that can help you rein in holiday spending:

Add up expected holiday-related expenses including gifts (for family, friends and co-workers), decorations, new clothes and accessories, gift-wrapping paper, cards, special meals and year-end gratuities. Don't forget travel-related expenses if you plan to leave town, and try to recall unanticipated expenses from last year that might recur.

The flipside - and more important aspect - of holiday budgeting is to calculate how much you can actually afford to spend. If you are deeply in debt, having trouble paying regular monthly expenses, worried about being laid off or haven't saved an emergency fund, this isn't the time to rack up additional debt.
So, revisit your list and look for items to trim. A few thoughts:

• Arrange gift lotteries with family members and close friends so each of you can concentrate your time, effort and money on getting fewer, nicer gifts.
• Speak candidly with friends, co-workers and extended family about placing a moratorium on exchanging gifts. They're probably feeling the pinch too.
• If the gift-giving gesture is important to you, suggest pooling your resources with others to make a sizeable contribution to a charitable cause you all believe in.
• If you're traveling just to get away, consider a "staycation" this year.

Give the gift of time. Older relatives and friends don't need another box of chocolates, but they could probably use your help with household chores, running errands or taking them to doctor's appointments. Plus, they would probably appreciate your company. For harried young parents, offer to babysit so they can run a few errands or simply recharge their batteries.

If you need to scale back on purchases, try making some gifts and get your children involved. Whether you're creating homemade cards or baking cookies for the neighbors, they'll appreciate being able to spend more time together. Plus, you can use it as an opportunity to discuss the need for better budget management - and why gifts from the heart are so important.

If you need help creating a holiday budget, visit Visa's free personal financial management program, Practical Money Skills for Life, (www.practicalmoneyskills.com/holiday) where you'll find easy-to-follow budgeting, holiday entertaining and travel planning tips as well as interactive calculators to track your spending.

Take a page from your parents' book: There are plenty of ways to enjoy the holidays without breaking the bank.

MASFAP to Offer NT4CM

In serving as the official National Training for Counselors and Mentors (NT4CM) managing organization for the state, the Missouri Association of Student Financial Aid Personnel (MASFAP) will provide FREE, local trainings specifically for high school counselors during the month of December.

Conducted by MASFAP's Early Awareness Committee, an outreach group that develops financial aid awareness projects for middle school (and younger) students and their families, NT4CM workshops will be offered in four statewide locations, beginning Dec. 8, 2009.

Online registration is available for the following dates and locations:

Dec. 8 - St. Louis, Saint Louis University
Dec. 9 - Columbia, University of Missouri-Columbia
Dec. 10 - Kansas City, Metropolitan Community College-Maple Woods Campus
Dec. 11 - Rolla, Missouri University of Science and Technology

Secure your spot today! To register for NT4CM workshops, visit www.masfap.org.

To volunteer to participate on MASFAP's Early Awareness Committee or for more information regarding the NT4CM workshops, please contact earlyawareness@masfap.org

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FAFSA Frenzy* Events in 2010 (*a program of College Goal SundaySM)

The Missouri Association of Student Financial Aid Personnel (MASFAP) and the Missouri Department of Higher Education (MDHE) are partnering closely to bring an expanded College Goal Sunday (CGS) program to Missouri for 2010.

Historically, CGS has occurred on the first Sunday following the Super Bowl. For 2010 CGS activities, MASFAP and MDHE elected to expand the program to three main dates, and a few sites are offering multiple dates. Because not all CGS events will be on Sundays, it may be confusing to use the name "College Goal Sunday." The MDHE and MASFAP discussed naming options with the MDHE's High School Counselor Advisory Committee, and decided to use the name "FAFSA Frenzy" for 2010. This term has been used by the Missouri Western CGS site for the last several years, and counselors agreed that using "FAFSA" in the title was critical. (Note: The CGS logo, colors, and branding will continue to be used on all promotional materials.)

As in past years, volunteers will drive the success of the 2010 CGS program. Missouri's financial aid community will be of critical importance, and MASFAP and MDHE encourage individuals who are interested in volunteering to sign up at a CGS site in your area.

2010 FAFSA Frenzy* dates and sites

*FAFSA Frenzy, a program of College Goal SundaySM, is offered in Missouri through partnerships between the Missouri Department of Higher Education (MDHE) with the Missouri Association of Student Financial Aid Personnel (MASFAP), the Missouri Higher Education Loan Authority (MOHELA), the Lumina Foundation for Education, and the YMCA.

If you have any questions regarding FAFSA Frenzy/CGS in Missouri, you may contact Julie Meyer, Angie Beam (MASFAP Early Awareness Committee co-chair), or your MDHE client service representative.

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College Goal Sunday (FASFA Frenzy) Training

College Goal SundaySM (CGS) is partnering with Mapping Your Future (MYF) to provide FREE FAFSA training for 2010 CGS volunteers. Andrea Cross, Associate Dean for Financial Aid at Saint Joseph's College in Standish, Maine, will go through each line of the FAFSA in addition to addressing issues that prompted changes to the current application. Each training session will be offered in the form of an online webinar and conference call on the following dates:

• Tuesday, Dec. 1
• 1:30 p.m. Central
• Thursday, Dec. 3
• 1:30 p.m. Central
• Tuesday, Dec. 8
• 1:30 p.m. Central
• Thursday, Dec. 10
• 1:30 p.m. Central
• Wednesday, Dec. 16
• 1:30 p.m. Central

To register, check out MYF's FAFSA training for volunteers at CGS sites Web page. To volunteer for a CGS/FAFSA Frenzy site, complete the Volunteer Application.

2010 Missouri State Holiday Schedule Announced

The State of Missouri* and the Missouri Department of Higher Education's (MDHE) servicer, American Student Assistance (ASA) in Boston, recently announced holiday schedules for calendar year 2010.

*Note: Missouri's Governor has the authority to grant additional state holidays at any time during the year. If the Governor exercises this authority during 2010, the MDHE will notify Missouri's financial aid and educator communities as soon as possible.

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2010-2011 FAFSA Materials

On Sept. 4, 2009, Federal Student Aid (FSA) released a draft copy of the 2010-2011 Free Application for Federal Student Aid (FASFA). If you would like to obtain detailed information regarding the application, the MDHE has attached a draft copy of the FAFSA in PDF format, along with the Summary of Changes for the 2010-2011 academic year.

2010-2011 FAFSA Draft in PDF Format, 922KB, 10 pages

Paper FAFSA Summary of Changes in Microsoft Word Format, 30KB, 1 page

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Updates to the Eligible Lender List

Contact: Jill Wilson
(573)526-7356

ADDITIONS:

CHANGES:
Fifth Third Bank, 808780
Fifth Third Bank obtained executed agreements with the MDHE to disburse MDHE-guaranteed loans through our ATOM disbursing agent.

First National Bank of Camdenton, 819564
First National Bank of Camdenton has requested that any future borrowers using them as a lender should be attending a Missouri school and a resident of Camden County.

Focus Bank, 806851
Focus Bank has requested to have their lender code limited to Missouri and Arkansas schools only.

Missouri Electric Cooperative Employees Credit Union, 834352
MECE Credit Union is requesting that any future borrowers using them as a lender should be a both a member of the Credit Union and must be attending a Missouri school.

Sallie Mae Bank, 834237
Sallie Mae Bank is now accepting new PLUS loan guarantees originated by the MDHE.

The MDHE was recently informed that the following financial institutions have requested to limit their lender codes to participating Missouri schools:

Arsenal Credit Union, 817854
Bank of Kirksville, 806757
Bank of Old Monroe, 829370
Bank of Rothville, 813989
Bank of Washington, 827468
Cabool State Bank, 806778
Canton State Bank, 821496
Commercial Trust Co., 814627
Eagle Bank & Trust, 828768
First Midwest Bank-Poplar Bluff, 826931
Maries County Bank, 814008
Paris National Bank, 830060
Show Me Credit Union, 806870
Sun Security Bank, 825627
West Community Credit Union, 820323

DELETIONS:
Bank of America, all lender codes
Effective Dec. 5, 2009, Bank of America will be suspending loan originations through FFELP and will no longer accept applications for new FFELP loans. Bank of America will continue to service all existing loan portfolios. All new FFELP loans must be set for disbursement on or before Dec. 18, 2009. For approved loans that meet the Dec. 18, 2009 deadline, Bank of America will honor scheduled funding including second disbursements. Bank of America will be unable to accept FFELP loan applications received on or after Dec. 5, 2009.

Jefferson Bank & Trust, 829263
Effective Nov. 15, 2009, Jefferson Bank & Trust exited the FFELP. No reissues, cancellations, or funding of any kind will be accepted after Nov. 15, 2009. All loans, first or subsequent, not made prior to this date will be cancelled.

Kearney Trust Company, 819462
Kearney Trust Company is exiting FFELP as of Dec. 13, 2009. No new loans should guarantee on or after this date. Subsequent disbursements will be allowed as long as the first disbursement was made prior to Dec. 13, 2009.

Compliance Questions and Answers

Q: When does a student-borrower need to complete a new MPN? A student first attended our institution in 1999 and signed a FFELP Master Promissory Note (MPN) on Oct.15, 1999. The student left school in 2002 and now has decided to return this year to complete her degree and use the same lender. Can we use the MPN from 1999 for new loans?

A: It depends on the disbursement date. The Common Manual outlines lender responsibilities with regard to MPNs in section 7.2.A. As long as the first disbursement of the new loan is made on or before 10 years from the date of the signed MPN, the MPN is still valid.

Utilizing an MPN with a signature date of Oct. 15, 1999 requires the first disbursement for the new loan to be made on or before Oct. 14, 2009. For purposes of calculating a MPNs expiration date, Oct. 15, 2009, is viewed as the beginning of the 11th year. A disbursement scheduled on or after Oct. 15, 2009, requires a new MPN.

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Compliance Tidbit: Teacher Loan Forgiveness

As of Aug. 14, 2008, the Higher Education Opportunity Act expanded eligibility in the Teacher Loan Forgiveness (TLF) program. Borrowers performing eligible teaching service in "educational service agencies" (ESA) may qualify to receive TLF. Like traditional TLF's:

• the ESA or school where service is provided must be designated by the U.S. Department of Education as serving a high concentration of students from low-income families;
• the borrower must complete five consecutive years of service;
• the borrower's loans must completely disburse before the end of the fifth year of qualifying service.

However, the expansion to include ESAs is not retroactive; part of the qualifying ESA service must occur after the 2007-2008 academic year. For instance, if a borrower provided teaching service at an ESA beginning in the 2003-2004 academic year, they would have completed their fifth year of service with the 2007-2008 academic year. Because no service occurred after the 2007-2008 year, they would not be eligible for TLF. If the teacher completed another year of ESA service in the 2008-2009 academic year, they would then be eligible for TLF.

More information regarding Teacher Loan Forgiveness can be found on the Federal Student Aid Stafford Loan Forgiveness Program for Teachers Web page.

Smart About Spending Expansion Portfolios Available for Preorder

It's official. The wait for the MDHE's highly anticipated high school personal finance materials is over. Missouri high school counselors and teachers asked for it, and the MDHE responded with its latest addition to the MDHE publication order form - SMART ABOUT SPENDING (SAS) expansion portfolio. Feedback received during a meeting of the MDHE's High School Counselor Advisory Committee helped spark the creative process for the SAS portfolios, which are now available for preorder via the MDHE Website.

In an effort to produce a tool that would be well-received by students and teachers alike, the MDHE's marketing and customer service unit met with the Missouri Department of Elementary and Secondary Education (DESE) earlier this year to discuss competencies outlined in curriculum for the high school Personal Finance course. Information collected during this meeting aided in creating a survey that went out to high school Personal Finance teachers across the state in May. Responses received from secondary teachers who taught the Personal Finance course during the 2008-09 academic year included:

• Do you use the Missouri curriculum from DESE?
• 63.2 percent said "yes"
• 21.1 percent use FEFE or NEFE materials

• What materials would you like to have or use?
• Folder/organization tool = 28.9 percent
• Printed text/publications = 28.9 percent
• Worksheets or activities = 60.5 percent
• Online tools = 28.9 percent
• Videos, computer games, etc. = 10.6 percent

Equipped with color-coded, stair-stepped tabs, the SAS expansion portfolio serves as a companion piece for the MDHE's College Life brochure and is comprised of loose-leaf sheets that cover all four competency areas listed in DESE's curriculum for the Personal Finance course:

• Income
• Money Management
• Spending & Credit
• Saving & Investing

As the gift-giving season rapidly approaches, help prepare your students' wallets for life beyond the Christmas buying frenzy. Place your preorder for the SAS expansion portfolios today.

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Instructions for Halting ATOM Transmissions over Holiday Break

With the holidays fast approaching, many schools will go on winter break. In the past, such school vacations have prompted requests that ATOM not fax or electronically transmit school rosters or transmit funds to the school's account during this time.

ATOM is happy to honor individual requests by placing schools on a date-specific school break and not transmitting funds or rosters to them during the scheduled period. On the noted release date, business will continue as usual, and ATOM will invoice the lenders for all disbursements scheduled during the break and release all funded disbursements to the school.

If this would benefit your school, please complete the ATOM School Break Form and fax it to Jill Wilson or Norma Gilliland at 573-526-7730 at least two (2) business days prior to the implementation of your school break. If you have any questions, please feel free to e-mail ATOM staff.

Staff News

Julie Meyer, MDHE director of marketing and customer service, recently agreed to serve as co-chair for the Missouri Association of Student Financial Aid Personnel (MASFAP) Early Awareness Committee (EAC). Appointed by MASFAP President Jason Crowe, Julie began serving a one-year term during the organization's fall conference, held Nov. 8-11. In addition to completing assigned tasks for the MDHE, Julie will work alongside her fellow EAC co-chair, Angela Beam, in an effort to coordinate College Goal Sunday events and other outreach activities that will increase Missouri's potential to educate students and their families on the importance of planning and preparing for college. MDHE Assistant Commissioner Leroy Wade was also appointed to serve as ex officio for the organization.