Category Archives: Feature Story

It’s Time to Disclose

January 23, 2018
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It is time to commence the annual ritual, of recent years, for many postsecondary schools.  That is, it is time for the annual update of institutions’ Gainful Employment (GE) Disclosure Templates, or the GEDT.  The U.S. Department of Education requires all postsecondary institutions that have GE programs to disclose applicable information via the GEDT. The 2018 GE Disclosure Template (GEDT) ED announced the release of the 2018 GEDT on the Information for Financial Aid Professionals (IFAP) Web site via GE Electronic Announcement #110 on Friday, January 19, 2018.  For a number of years, the GEDT had been made available in the

We, the People… Knowing who we are on Constitution Day, and Every Day.

August 31, 2017
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We, the People… Knowing who we are on Constitution Day, and Every Day. A question came to mind a number of years back.  “Why do I believe what I believe?”  And, perhaps just as importantly, “what do I believe?”  As citizens of the United States of America, we have certain rights that are foundational in our beliefs and way of life, that make us distinct from any other country in the world.  In our unique system of government, our Constitution guides the federal government in matters of interstate commerce, revenue generation for limited purposes (e.g., finance a war effort if necessary), and resolution of disputes between states.  These limited powers of the federal government are fundamental to our

“Year-Round” Pell

July 31, 2017
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Going ‘Round, and ‘Round (or, the Latest Rendition of “Year-Round” Pell) Those who have been around postsecondary education for the last eight years or so, likely recall the quickly implemented “year-round” provision of the Federal Pell Grant (Pell Grant) program in 2009-2010.  That was the “first” edition.  The original “year-round Pell” was created by the Higher Education Opportunity Act (HEOA) of 2008.[1]  It authorized schools to disburse up to two Pell Grants in a single award year to eligible Pell Grant students.  The first edition of year-round Pell provided for implementation beginning in 2009-2010.  Although it was short-lived due to the pr

Interest Rising

June 6, 2017
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Some things just naturally keep your interest.  One item of which most college students are acutely aware, and which attracts “interest” each year, is the interest rate that will be applicable to loans taken out for the new award year.  Although federal student loans taken out after July 1, 2013, have a fixed interest rate structure, loans borrowed in each award year have a different interest rate than the prior year.  The loans to be borrowed in the award year of July 1, 2017, through June 30, 2018, are no exception.  And, it is of note that interest is rising. As those keen on this topic may recall, a new method of rate determination came about as a result of the Bipartisan Student Loan Certainty Act of 2013, which overhauled the Federal Direct Student Lo

You’ve Got That Right! Verification 2016-2017

August 1, 2016
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It is that time when millions of students are finalizing plans and preparations to attend the postsecondary institution of their choice during 2016-2017. Each year the majority of those students submit the Free Application for Federal Student Aid (FAFSA).  With more frequency, the FAFSA is typically completed as the FAFSA on the Web (FOTW).  This expedites the opportunity for their FAFSA results to be processed more quickly.  That is, unless they are selected for the process called “verification.” Verification is not anything new.  It is the process of making sure that the applicant for Federal Student Aid “got it right” on their FAFSA, so to speak.  The whole verification concept began with its predecessor back in the 1980s. The, at the time, recently created U.S. Department of Education (ED), promulgated the idea of “validation.”  That validation method had a primary concentration on the accuracy of data in applications for Federal Pell Grants.  But, we must remember that correctness of data has always been a preeminent focus of the Higher Education Act (HEA) related to students’ applications.  Even before validation and verification, the HEA required

Program Not to Exceed By More Than 50% State Minimums

July 26, 2016
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Immediate Impact! cometaAlmost twenty years ago, a movie that is classified across multiple genres was released:  Deep Impact.  In this disaster drama, people learn of the impending impact of a comet on earth.  Efforts are made to negate the potential for impact from the point of discovery of the comet and its trajectory, until the comet’s projected arrival about a year later.  Suspense mounts, but there is no initial panic, because, although it would cause devastation, there was still time, and there were options to explore.  While it would create a deep impact, it was not immediate.  Thus, there was less alarm to the average person. In our professional world, schools must remain vigilant, as well, to what is barreling through the financial aid skies of legislation, regulation, authorization, and guidance.  One more recent

Holidays Hours

December 15, 2015
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Because the goodwill of those we serve is the foundation of our success, it’s a real pleasure at this holiday time to say thank you, as we wish you a year of happiness and prosperity FAME’s Office will be closed for our Annual Employee Holiday Party at 12:Noon EST on Friday, December 18, 2015 and  will resume normal office hours on Monday, December 21, 2015. FAME will also be closed on December 24th, December 25th and January 1st to celebrate the holidays with our families.

Career Pathway Programs and the Journey to Oz

October 9, 2015
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The passage of The Consolidated and Further Continuing Appropriations Act of 2015 (Pub. L. 113-235) reinstituted the opportunity for a student’s Title IV eligibility through ability to benefit (ATB) alternatives.  But, this ATB alternative opportunity is only available if such a student is enrolled in an "eligible career pathway program."  The U.S. Department of Education (ED) has provided some guidance in regard to eligible career pathway programs, but it has been quite limited in scope.  As a result, numerous schools have inquired about what they consider to be an eligible career pathway program (CPP).  We appreciate our clients' interest in the perceived opportunity they anticipate to be available via the CPPs.  Yet, the legislation allowing for CPPs has not developed to be the panacea desired.  There has been limited and, apparently, somewhat contradictory information from ED, as we understand it.  The result is that a number of concerns have surfaced.  As it turns out, venturing into the avenue of CPPs may actually be like a trek down the Yellow Brick Road in search of Oz, fraught with obstacles and peril.  Unless and until ED provides more definitive guida

LOAN COUNSELING CONUNDRUMS

July 17, 2015
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Student loan debt is the hot topic in the news media in recent months.  Most of the articles touching on this subject focus on the amounts students borrow, with an indication that such borrowing is out of control.  Indeed, amounts that students borrow during their academic career are rising1.  Student loan indebtedness is something about which to be cautious (as is any type of debt!).  But, beyond the increase in student loan debt is a perhaps more subtle set of concerns.  These less evident issues relate to the student debt topic from at least two perspectives.  They create the loan counseling conundrums. Conundrum #1 Traditionally, student financial aid professionals have touted caution when providing student loan counseling.  Yet, advice toward caution has often been softened or negated by the offsetting promotions made by either the same financial aid professionals, admissions counselors, or other interested parties.  The counteracting assertions made are that student loan debt is “good debt” because it is obtained with the goal of investing in the student’s future increased earning power.  Thus, students face the first loan counseling con

THE GAINFUL EMPLOYMENT DANCE – or, Understanding the Distinction between Disclosure and Reporting Requirements

July 17, 2015
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Those who dance understand that there are a number of specific aspects in being a great dancer.  One is confidence in knowing what steps are appropriate for the music being played.  This characteristic is also important when considering the gainful employment (GE) regulations.  It cannot be considered a truism that those who have responsibility for GE compliance on their campus must be great dancers, or that great dancers would make exceptional employees to work with the GE regulations.  However, the characteristic noted about dancers is also important for those working to comply with the GE regulations. When working with GE, it is important to be confident in the appropriate steps or requirements.  In the GE Dance, the proper steps include both disclosure and reporting requirements as put forth by the US Department of Education (ED).  While the regulations have been out for a while now, and a number of efforts have been made to distinguish the difference between the requirements related to disclosure and those related to reporting, there still seems to be a bit of stumbling in the dance. People remain uncertain of what moves constitute the correct steps.  In choreographi

The Future of History—PLUS Loan Adverse Credit History, That Is

March 31, 2015
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PLUS Loans have been in the news in the last few years.  Specifically, the topic of interest has been the impact of an adverse credit history on PLUS Loan applicants.  For nearly twenty years, the PLUS Loan program had no noteworthy issues.  However, in 2011 the U.S. Department of Education (ED) modified the criteria to include unpaid collection accounts and charge-offs in their review of PLUS applicants’ credit history.  This was to be more closely in agreement with then current regulations.  This change was not officially announced before implementation, but rather felt by applicants and schools.  Since that time, after much public opinion was expressed, and some intermediary proactive notifications by ED to applicants who may gain eligibility after a credit history reconsideration, a slow move to change the regulations related to adverse credit meandered through the regulatory process.  The Federal Direct PLUS Loan final regulations were published on October 23, 2014. The final regulations were scheduled to be operational as of July 1, 2015.  But, ED stated in the preamble to the rules that it may implement a

Keeping it Professional

October 28, 2014
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With a title such as is given to this article, one would think that this discussion may contain information on workplace relationshipsmad or performance.  However, there is another appropriate area for discussion in regard to the admonition to keep it professional.  In the world of Federal Student Aid, that area for exploration is the matter of professional judgment. Professional judgment is an interesting topic.  A number of schools hardly ever use this provision in the law, while some may seem to be quite zealous in the application of this component of the financial aid administrator’s tool kit.  Yet others, though they may utilize the option for professional judgment with some frequency, they do so with trepidation as they are uncomfortable with the opportunities and requirements of taking such action. In light of these differing approaches to the use of professional judgment in financial aid, we will review this topic in more depth.  While t

Help your admissions team be their best

July 14, 2014
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Attracting students to your school is harder and more expensive than ever. In fact, it requires 50% more marketing budget to get the same number of enrollments that you had in 2008, according to recent research by Velocify, evaluating cost-per enrollment at publicly-traded proprietary schools. If your school competes for students, it is more important than ever to get every bit of value out of your marketing dollars by ensuring your admissions team is optimizing all new student inquiries. To make sure your admissions team is operating at their very best, here are three of the most important habits of successful enrollment counselors: 1. They follow up The first habit is to simply follow up. Make sure you are following up with every inquiry. While this may seem basic, a staggering 66% of prospective students reported they have experienced a “no response” from a school they had expressed interest in, according to a recent study jointly conducted with

State Authorization…Once More

July 13, 2014
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The time for the State authorization regulation enforcement is upon us.  Oh, but wait.  “JK!”  (That is “Just kidding!” in social media lingo.)  But, it phoneseems like we have heard “State authorization” before.  Actually, we have heard it before.  More than once!   Maybe it is time for the enforcement?  What is the scoop on State authorization? Regulatory Deadline Extensions The enforcement of the regulation in 34 CFR 600.9 and the explanatory dialog in the preamble to these October 29, 2010, Program Integrity regulations were to be effective July 1, 2011.  However, a stay of enforcement on this requirement was allowed until July 1, 2013, for those schools in States* that could not implement the changes in the regulations by July 1, 2011.  Subsequently, an additional extension was granted to allow for delayed enforcement of the regulation until July 1, 2014.  This was due to several States notifying the U.S. Department of

Priming the Pump: A Primer on the Reauthorization of the Higher Education Act

July 13, 2014
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In times gone by, it was not uncommon for families in the United States to have their own well as a source of water.  Attached to the well was a pump.  PUMPThe iconic hand pump was a necessary component to having the water drawn up out of the well to the surface, whether the pump was located outside the house or one that was installed inside the house, most likely by the kitchen sink.  A key point for success in drawing the water from the well was to ensure the pump was primed.  In this article we want to prime your pump, so to speak, to give you an understanding of what reauthorization of the Higher Education Act is all about, and to hopefully open up the free flow of thoughts on the topic that you may share with your colleagues and Congressional representatives in both houses of Congress. The Higher Education Act (HEA) Through the Years Most individuals involved in some aspect of higher education have at least heard of the term, Higher E

Dropouts: The Cost is High

July 11, 2014
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Whatever the reason a student chooses to walk away from an education – the statistics are clear: too many are dropping out. For educators, there’s nothing more discouraging than witnessing the lost potential of students who will never gain the knowledge, skills and confidence that come with earning a degree or lay the crucial foundation that prepares them for personal and professional success. The economic impact on the student – and on the college, university or vocational school – is great as well. Students who fail to finish a degree suffer from lower future incomes (up to half a million dollars) and are more likely to default on loans. High dropout rates not only erode the reputations of educational institutions and cause undue hardship on instructors, but directly lead to lower revenues and may jeopardize government-backed loans. Early Warning Systems (EWS) Work Using predictive analytics and automated data processing (or “machine learning”), Voyant can mine the vast amounts of data collected by FAME to uncover patterns of historical behavior. For example, do first-time post-secondary goers over the age of 20 drop out more often than ot

When Hell Does not Freeze Over

April 24, 2014
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News reports this past fall highlighted two situations of institutions that had been recipients of a Federal Program Review of their Title IV Federal Student Aid (FSA) programs.  The schools had been cited by the U.S. Department of Education (ED) for going further than ED believed to be warranted and acceptable in exercising discretion in the use of professional judgment when considering students’ applications for FSA funding.  Compliance FeatureYes, this can many times be an area of exploration by ED program reviewers when visiting schools.   But, the interesting point in these two cases is that ED conducted the on-site program reviews at these institutions in the 1990s.  (Did someone ask the question of when ED will complete the determination on their own more recent program review?)  Late last year ED contacted the two institutions with a request for payment of funds as a result of the program review in the ‘90s. 

A Careful Look at Time

April 24, 2014
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Tick tock. A careful eye is kept upon the clock.  Many managers are—without desire, yet by circumstance required—on the lookout for those certain clocksemployees who like to keep an eye upon the clock; those always ready to bound for the door as soon as the clock’s hands get in right alignment.  But, of course, in the world of financial aid, there is another key aspect of clock watching that is critical to a successfully run financial aid operation. That comes in the sphere of clock-to-credit hour conversions.  This concept has been around for years, being one of several other pivotal aspects of the now famous October 29, 2010 Program Integrity regulations.  But, it has gained a new place of prominence as if the very idea of clock-to-credit hour conversions was to be on display like the legendary Big Ben.  While it is true that the majority of such schools affected by this are in the private, proprietary sector

The Supreme Court on the Defense of Marriage Act and Title IV Aid

January 23, 2014
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The United States Supreme Court. In June of 2013, the Supreme Court of the United States (SCOTUS) ruled on the Defense of Marriage Act (DOMA) in the case of United States v. Windsor commonly referred to as the Windsor case.  Specifically, the Court’s decision invalidated Section 3 of the DOMA.  That section of the DOMA prohibited federal agencies from recognizing same-sex marriages for purposes of federal programs, including the Title IV Federal Student Aid (FSA) programs.  Since that section of the law was rendered invalid, there have been significant implications regarding the application for FSA programs, as well as related processing effects. The U.S. Department of Education (ED) recently released its official guidance on the impact of the SCOTUS decision in the

Seeing Red

October 14, 2013
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Have you been seeing anything “red” lately? One piece of regulation that affects many schools that may often time be overlooked is a little thing called the “Red Flags Rule”.  This piece of regulation is applicable to all schools that participate in the Federal Perkins Loan program, and may apply to many institutions that offer an extension of credit to their students, e.g., granting institutional loans or allowing students to make installment payments. The definition that most likely is applicable to educational institutions that makes the “Red Flag Rules” pertinent is the part that refers to “any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.”  If an account is subject to a reasonably foreseeable risk to consumers (students) or to the institution from identity theft, it may be considered a “covered account” to which the “Red Flag Rules” apply.  Thus, it is possible that an educational instit

An Artful View of Interest Rate Calculations

October 14, 2013
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As fine art brings varying interpretations of the meaning of what is seen, over time it would seem that student loan interest rates are perceived similarly.  Across the decades, we have observed that at one point interest rates for student loans are thought to be best when set at a fixed rate.  At other times we have seen the rates to be determined based upon a variable rate that is tied to other instruments such as the Treasury bills that change annually.  Of note is that after the “dot-com bubble” episode in our nation’s economic history, viewers of the artful interest rate calculations began seeing it through a different lens and felt that such a calculated rate was no longer a thing of beauty, but rather an atrocity.  So, the canvas for the fixed rate calculation was placed on the easel.  In 2002, after much artful critique by student interest groups and the public at large, the gallery owners felt it was time to rotate to a new display, thereby bringing to light the Higher Education Act Amendments of 2002 that painted the fixed rate structure that became effective with the season of the 2006-2007 award year.  Then, with further rearrangement of the displayed artwor

President Signs Bill Lowering Student Loan Interest Rates

August 9, 2013
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As reported in this week's FAME Inside Report, and prior August 1 FAME "Did You Know?," Congress had finally reached agreement on the student loan interest rate debate. Congress passed the Senate-amended version of the House Bill, HR 1911, on July 31 which creates a new interest rate structure that lowers all 2013-2014 undergraduate Direct Loans to 3.86%. All that remained was for President Obama to sign the bill. Friday, August 9, 2013, the president signed the Senate-amended HR1911 (now known as the Bipartisan Student Loan Certainty Act) into law.  The new student loan interest rate structure discussed previously in the FAME Inside Report and "Did You Know?" is now in effect.  (No

Student Loan Counseling

August 6, 2013
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The requirement for entrance and exit counseling for student borrowers has been around for decades now.  Some may recall the days when it was more common to hear of these events as entrance and exit interviews.  Perhaps that terminology was used due to the fact that in an era gone by students actually had to have an in-person interview.  This interview hearkens all the way back to the olden days of the Federally Insured Student Loan (FISL) program, which was the precursor to the Guaranteed Student Loan (GSL) program that became the Federal Family Education Loan Program (FFELP), and which was, in turn, finally replaced by the Federal Direct Loan Program (DL).  In those early days, students actually had to schedule an appointment with a private lender—there were no DL options back then—and go to the bank or credit union to have the terms of the loan explained to the borrower.  That is, the student’s responsibilities, rights, and other terms of the loan were explained in person, in detail, before the loan was made.  Thus, it was more like an “interview” to gauge the borrower’s understanding of the loan terms, etc., before the loan was made.  Likewise,

Congress reaches agreement on a new interest rate structure for Federal Direct Student Loans

August 1, 2013
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This news flash is making the headlines across the country. After months of political back and forth, both houses of Congress have come to a resolution on the student loan interest rate debate. Late yesterday the House passed the Senate-amended version of House Bill, HR 1911. It now awaits the president's signature, which is anticipated to happen without delay. The new interest rate structure will be applied retroactively to all Federal Direct Loans with a first disbursement on or after July 1, 2013. The current version of the bill awaiting signature of the president puts the interest rate structure to be set using the following formulas: Undergraduate Stafford loans (subsidized and unsubsidized): 10-year Treasury Note plus 2.05 percent, capped at 8.25 percent. Graduate Stafford loans: 10-year Treasury Note plus 3.6 percent, capped at 9.5 percent PLUS loans (graduate and parent): 10-year Treasury Note plus 4.6 percent, capped at 10.5 percent.

Gainful Employment: Weighed in the Balance

April 26, 2013
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Gainful employment. This has developed into one of the most debated topics in modern Title IV regulatory history.  Ever since before their publication in the Federal Register, the October 29, 2010 Final Rules (also known as the Program Integrity Regulations), have been a hot topic.  The 10/29/2010 regulations, along with the June 13, 2011 Final Rule on the Gainful Employment – Debt Measures, have provided plenty of fodder for ongoing dialog and debate in the higher education industry. Legal Proceedings But, of course, the dialog and debate did not just remain in the realm of the higher education industry.  It has wound its course into the legal system as well.  After an early suit in July 2011 filed by the Association of Private Sector Colleges and Universities (APSCU) not long after the last of the GE regulations were published, the results of the suit have been decisions from the Courts and appeals by the U.S. Department of Education (ED).  Last June the U.S. District Court for the District of Columbia reached a decision regarding APSCU's challenge to the Department of Education's GE regulations wherein the Court vacated (made legally null and void)

Chasing the Money – What do the Direct Subsidized Student Loan bills passed by Congress mean in practical terms?

April 25, 2013
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Almost a year ago on July 6, 2012, President Obama signed into law the bill (P.L. 112-141) Congress passed that kept the interest rate on Federal Direct Subsidized Loans at 3.4% while a student is in school. However, just as importantly in that bill was a new provision on a different matter—a limitation on the duration of eligibility for Direct Subsidized Loans.  This bill, as several others in the last couple of years, was promulgated with the purpose of chasing the money.  That is, Congress is trying to come up with additional ways to address budgetary shortfalls.  However, this bill was also seen as an incentive to see students graduate more quickly.  To do so, it causes the students to chase the money.  Or, in other words, from a student’s perspective:  “If I want to get the best