MDHE Digest Online
Printable Version
July 2008
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Compliance Q &A
This portion of the MDHE Digest includes questions and answers about topics that our Missouri financial aid officers bring to our attention. If you have a regulatory or policy question for the MDHE, contact your MDHE client service representative, Dan Day, or the MDHE at info@dhe.mo.gov. Q: Can changes to a school's preferred lender list be made after July 1? Does the list have to be static throughout the year? A: The regulations (34 CFR 682.212(h)(2)(vi)) state that the school must update the preferred lender list no less often than annually, which means that the list cannot be without review for longer than a year. The school may elect to change the list more often as long as they continue to meet other requirements, such as including at least three unaffiliated lenders. Citations:
Q: Can a school use the same MPN for different lenders? A: No. A new MPN is required if the borrower's lender (for FFELP) changes, unless the lender changes as a result of a merger or acquisition. Citations:
Q: Ensuring Continued Access to Student Loans Act (ECASLA), or P.S. 110-227, created a new deferment for parent PLUS borrowers when the student is enrolled at least half time for loans first disbursed on or after July 1, 2008. Can a parent borrower pay interest on a parent PLUS loan while it is in this new deferment status? A: Although many schools are using the term "deferment" to describe the change made for parent PLUS loans first disbursed on or after July 1, ECASLA does not actually add a new deferment type but instead creates a "grace period" that parent PLUS borrowers may request. The new provision that allows parent borrowers to postpone payments until six months after the dependent student ceases to be enrolled on at least a half-time basis. And yes, a parent PLUS borrower has the option of paying interest during the new "grace period" as well as during authorized deferment periods. GEN 08-08 describes the treatment of interest under ECASLA "grace periods" and for authorized "deferment periods": "For PLUS loans that are first disbursed on or after July 1, 2008, the HEA now requires that the interest that accrues on the loan from the date of the first disbursement until 60 days after the loan is fully disbursed be capitalized for parent PLUS borrowers who do not elect to delay repayment on the loan based on the dependent's enrollment status, and for all graduate and professional student PLUS borrowers. Lenders must notify borrowers of the capitalization and provide them the opportunity to pay the capitalized amount of accrued interest. For parent PLUS borrowers who opt to delay repayment on a PLUS loan until six months after the dependent student for whom they borrowed ceases at least half-time enrollment, the interest that accrues on the loan prior to the delayed repayment start date may be paid, at the option of the borrower, either monthly or quarterly, or may be capitalized no more frequently than quarterly. For interest that accrues on PLUS loans during an authorized deferment period, the borrower may choose to pay the interest either monthly or quarterly, or have it capitalized no more frequently than quarterly." Citations:
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Missouri Institutions Receive Grant Money to Aid in Default Prevention
The Missouri Department of Higher Education (MDHE) recently announced plans to distribute $702,400 to 26 Missouri postsecondary schools through its Default Prevention Grant program. The grants are designed to help student borrowers establish smart repayment habits and avoid default by providing funds to implement activities such as debt management programs, retention activities, and financial literacy workshops. July's Featured Default Prevention Grant School: Park University Park University is based in Parkville, Mo., with multiple campuses across the country and a strong population of distance learners. The university implements a combination of programs and activities to help curb student loan delinquency and default. Some of the university's plans for 2008-09 include: Online Chat - A weekly online chat room is facilitated by personnel from the office of Student Financial Services, targeting students who may not be able to access the office during regular business hours - but available to all students. Although there are designated topics for each week, students may log on to ask other general questions relating to financial aid. Financial Literacy Seminars - Budgeting, responsible borrowing, and debt management seminars are held on campus and are also available via live video webcast and archived for students to access at a later time. Financial Literacy Awareness Day - This campus-wide event utilizes the resources of various campus departments and outside partners to provide booths with information on credit counseling, scholarship searches, career development, general financial aid matters, and the office of Student Financial Services. Newsletters - Quarterly newsletters provide over 6,000 students with materials on loan repayment, finding employment, budgeting, credit cards, applying for financial aid, and general information about developments in the student loan process. Park University will also use grant resources to continue funding a graduate assistant position in the office of Student Financial Services. Additional usage of grant funds include: partnering with faculty to orientate new students on financial literacy, expanding distribution of their newsletter to faculty and staff, sending reminders to graduates entering their grace period, identifying and focusing on withdrawn borrowers, and adding e-tutorials to their current Web site. To learn more about the Default Prevention Grant Program, or to arrange for free, customized training on your campus about default prevention practices or debt management, please contact Marilyn Landrum or Sarah Schedler.
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MYF Enhances Indebtedness Customization Option for Schools Using OSLC
In response to the regulatory requirement to provide Grad PLUS borrowers with average indebtedness information beginning July 1, Mapping Your Future has enhanced its indebtedness customization option for schools using Online Student Loan Counseling (OSLC). The new indebtedness customization feature allows schools to provide an average loan figure per federal loan type, instead of the former process that allowed them to enter one average loan figure per counseling session. The school then chooses to display other average loan information for students within the federal loan counseling sessions-giving students a total debt picture. The indebtedness table appears with the accompanying monthly payment amount (based on the maximum interest rate) above the Debt/Salary Wizard. Schools can use the new indebtedness feature by logging in to the FAO Access Area from the financial aid professionals' page at mappingyourfuture.org/FAP/. (Schools that previously used the original indebtedness customization service will need to add the debt levels to the new feature.) Mapping Your Future offers 17 OSLC sessions, including a brand new session for TEACH Grant recipients. OSLC is a free service, provided by the guaranty agencies from around the country that sponsor Mapping Your Future, as well as the Friends that support the organization. All of the counseling sessions are guarantor and lender neutral. OSLC enables schools and students to meet federal loan counseling requirements conveniently. It also enhances the loan management education of the student by actively involving them in the counseling - making OSLC an important default prevention tool. For more information about using OSLC effectively, refer to the User's Guide at mappingyourfuture.org/oslc/usersguide.htm.
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Tips for Summer Saving: An economic tidbit from your default prevention team
Summer is in full swing, gas prices are soaring (seemingly by the hour), and Americans are more mindful of ways to stretch their hard-earned dollars. The following tips for summer saving were provided by 360 Degrees of Financial Literacy as a way to help us sail through summer with a little less stress on our wallets. Summer Tip #1: To save on your air conditioning bill, turn off unnecessary lights during the day. Much of the energy used by incandescent bulbs is emitted as heat. Summer Tip #2: To save 1-2 percent on your energy bill, unplug electronic devices and chargers when they aren't in use. Most new electronics use electricity even when switched off. Turn computers and printers off at the power strip. Summer Tip #3: For a more energy efficient way to cook, use your microwave instead of your stove. Microwaves use two-thirds less energy than conventional stovetops. Summer Tip #4: Consider replacing your incandescent bulbs with compact fluorescent light bulbs, or CFLs. They use about 75 percent less energy and give off 75 percent less heat but produce the same amount of light as incandescent bulbs. Summer Tip #5: Make some shade! Awnings, blinds and drapes keep sunlight from entering your home. Install them on windows, skylights, doors, and other places where the sun comes through. During the day, closing the blinds and drapes to filter the sun will keep the room's temperature from rising. Summer Tip #6: Planting trees in strategic areas can reduce the energy a house uses for cooling by up to 25 percent. Deciduous trees (that lose their leaves) help block the sun during the summer and still allow the winter sun to warm your home. Also, planting trees and shrubs around your air conditioning unit can increase its efficiency by up to 10 percent. Just make sure to place them at least 18 inches away so they don't block the vents. Summer Tip #7: "Summerize" your home by adding insulation and sealing air leaks around the house. Add insulation to the attic or add to already existing insulation. Weather-stripping and sealing drafty doors and windows will keep your house comfortable year-round and potentially save you hundreds of dollars. Summer Tip #8: On a hot, sunny day, dark-colored roofs can reach temperatures of up to 150º to 190º F, heating the living spaces below. Consider adding a reflective coating to a dark roof, or choosing a lighter color when it's time to replace the roof. Summer Tip #9: Have an extra refrigerator in the garage that you're not using? Unplug or recycle that spare refrigerator if you don't really need it, and it could save you up to 10 percent or more on your energy bill. Summer Tip #10: Thinking about buying a new refrigerator? Refrigerators with a top or bottom freezer design can save you an additional 2-3 percent on your energy bill compared to a side-by-side design. Saving money where possible is simply the smart thing to do. The MDHE believes financial literacy and smart money management are key components in tackling student loan default. To schedule a free default prevention or debt management training at your school, please submit the training request form.
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Staff News
MDHE expands its staff During the two most recent Missouri legislative sessions, several pieces of important higher education legislation were passed and signed into law. Many of these laws created new programs and new responsibilities for the Missouri Department of Higher Education. To help the MDHE perform its expanded duties, the MDHE is expanding its staff with five new positions, including two new positions within the state aid area as well as an additional position within the compliance department. As the positions are filled, the MDHE will introduce new staff members in the August and September issues of the Digest . . . Stay tuned! Furthermore, as a part of the overall updated staffing design, Robert Powell was promoted to a newly created Policy Analyst position. In his new role, Robert will be the primary person responsible for analyzing new legislation, regulations, and laws and identifying any impacts on MDHE policies and Missouri financial aid officers. Robert will also work closely with Dan Day, Senior Associate for Compliance, in researching and answering your financial aid policy questions. Robert may be reached at robert.powell@dhe.mo.gov and Dan may be reached by emailing dan.day@dhe.mo.gov. Get to know the MDHE's School & Lender Services staff! Shellee Kilbride is the senior associate for the School & Lender Services area. She supervises the School & Lender Services staff and oversees daily operations. Shellee lives with her husband, Chris, and three children, CJ (11), Jaycee (7), and Jayke (5 months). Her hobbies include spending time with family, exercising with Wii Fitness, and doing homework. She received an associate degree from Moberly Area Community College in 1999 and later went on to complete her bachelor's degree at Columbia College in 2001. She is currently pursuing her master's degree with Columbia College. Shellee has been in the field of financial aid for 11 years and came to work for the MDHE in August of 2007. She says, "The industry changes every day, and I'm happy that the MDHE is able to consistently provide great services without expense to Missouri's tax payers. This is an exciting year to be able to subsidize FFELP default fees for our Missouri students when there are so many other uncertainties in the industry." Shelly LeCure is the ATOM accounting coordinator. Shelly manages the ATOM escrow account and provides customer service to schools and lenders. She also tracks and monitors ATOM statistics and the default fee process. Shelly is a 1992 graduate of Central Methodist College with a bachelor's degree in business with a minor in economics. She lives with her husband and two sons, Matt (8) and Joey (3). Her hobbies include spending time with her boys, biking, hiking, rock climbing, and reading. Shelly has nearly 3 years experience at the MDHE. Diann Tews is the area's office support assistant. Diann has an associate degree in business, and she and her husband live in the New Bloomfield area. Her hobbies include gardening, sewing, and spoiling her 12 grandchildren. Diann enjoys working with the School and Lender Services group, of which she has been a part for nine years, and feels that the group is "providing helpful, courteous service to the schools and lenders." M. Kay Perry is our program specialist focused on d-fee processing and providing customer service to lenders. Kay is the youngest of 12 children and has two sons, Michael and Sean. Kay has an Associate of Arts in business, an Associate of Applied Science in data processing, a Bachelor of Science in management, a certificate in upholstery, and a certificate in building construction. Her hobby is calling all of her parents' descendants on their birthdays and anniversaries to keep in touch. That is 195 birthdays alone - and the number goes up every year! Kay is "proud that we are going to pay the default fees for students attending Missouri postsecondary institutions and that we provide a free service to schools and lenders." Jill Wilson - As the ATOM coordinator for School and Lender Services, Jill's job responsibilities include keeping up with the changing student loan industry by making changes for lenders and schools, and processing agreements and profile updates. Jill has been in her position for about two and a half years. Jill has a bachelor's degree in business administration from Columbia College and recently graduated from Walden University with her MBA. She lives with her husband and two children, Lane and Addisyn. Jill is "proud that we are able to provide great customer service in the School and Lender Services area." Norma Gilliland is our program specialist assisting schools and lenders with loan maintenance of FFELP loans. Norma worked for the MDHE in the 1990s and returned in 2006; she now has a cumulative of more than five years of MDHE service. Norma was born in Pennsylvania and moved to Missouri in the Mid 70's. She is married to Randy and has two beautiful daughters, Mariah (12) and Alexis (8). She received her associate degree from Hesston College in Kansas City and then went on to complete her bachelor's degree at William Woods in 2005. Her hobbies include taking care of her family, traveling with Mariah's softball team, and participating in school activities for both girls. Norma has worked for the State of Missouri since 1995. Lisa Wilson is one of our client managers. (Be sure to check out our "Client Manager" article in our Product News section.) Lisa is a graduate of Central Missouri State University (now known as the University of Central Missouri) where she received a bachelor's degree in education in 1988. She holds a lifetime certificate from the Missouri Department of Elementary and Secondary Education to teach grades 1-8, and she has been employed with the MDHE for about eight years. Lisa lives with her husband, Darryl, and two sons, Brock (17) and Quinten (14), on their family farm north of California, Mo. Her hobbies include camping, antique shopping, and attending football and basketball games for her sons. Lisa has been with the MDHE since 2000 and began working in the School and Lender Services-ATOM area in 2006. Lori Tarpein is our other client manager. Originally from the St. Joseph area, Lori graduated from University of Missouri - Kansas City with a Bachelor of Arts in psychology and worked for the Platte County Children's Division before joining the MDHE. She lives in Jefferson City with her fiancé, John, and their two cats. Her interests include baking, going to flea markets, and playing canasta with her family. Lori has been with the MDHE for a year and a half. She says "I enjoy working with the schools and feel that MDHE has a genuine concern for our clients and a sincere eagerness to help them." MDHE Staff return from NASFAA Conference As referenced in last month's Digest, marketing and default prevention staff from the MDHE recently traveled to Orlando to present two sessions to the National Association of Student Financial Aid Administrators. In addition to our presenters, Leanne Cardwell (assistant commissioner), Dan Day (senior associate - Compliance), and Shellee Kilbride (senior associate - School and Lender Services) also attended the conference for the latest in policy updates and to participate in a variety of financial aid interest sessions.
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Guidance for Implementation of Missouri Returning Heroes' Act
After it was announced in last month's Digest that creation of the Missouri Returning Heroes' Act would restrict tuition to $50 per credit hour for certain combat veterans at Missouri public institutions of higher education, the MDHE has received numerous inquiries about how to correctly implement this new requirement. To help answer your questions, clarification about the new Missouri Returning Heroes' Act is now available via the MDHE Web site. Frequently asked questions and helpful responses about the Act have been compiled into an easy-to-follow Q&A format. The document addresses timelines, combat service, residency, other financial assistance considerations, grade point average, clock hours versus credit hours, and other critical components. It will be updated with any additional information received by the MDHE. In addition, a sample veteran discharge form, a list of designated combat zones, and examples of combat service medals are provided. The Missouri Veterans' Commission is also an additional resource for schools when trying to establish eligibility. While the Veterans' Commission cannot make eligibility determinations, they can provide information about available documentation and interpretation of the information relating to a veteran's military service. If you have further questions about how to implement the Missouri Returning Heroes' Act at your institution, please contact Zora AuBuchon, general counsel for the MDHE.
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Bright Flight Changes for 2010-2011
As you may be aware, changes are in store for the Bright Flight program beginning with the 2010-2011 academic year. The changes are a result of Missouri's omnibus higher education legislation that became effective August 28, 2007. The annual award will increase from $2,000 to $3,000, subject to appropriations, for students with an ACT or SAT score in the top 3% of all Missouri students taking those tests. The $3,000 award will apply to:
The program also will be expanded to include students with an ACT or SAT score in the top 4-5% of all Missouri students taking those tests by the June test date of their senior year. Subject to appropriations, these students will be eligible to receive an annual award of $1,000, which may be renewed. The 2010 high school seniors will be the first graduating class eligible for the $1,000 award. Students who achieved a score in the top 4-5% but who graduated from high school prior to 2010 will not be eligible for a Bright Flight award. Qualifying scores are announced each fall for the next academic year. The qualifying score(s) for the 2008-2009 academic year, announced last September, is an ACT composite score of 31 or above, or an SAT math score of 790 and a verbal score of 780. The qualifying scores for the 2009-2010 academic year will be announced in late August or early September 2008, once the assessment companies provide that information to the MDHE. The qualifying scores for the top 3% and the top 4-5% for the 2010-2011 academic year will not be available until fall 2009. The MDHE plans to have FAMOUS updated to accommodate these changes by January 2010 to allow for smooth processing for the 2010-2011 academic year. Plans are also underway to update the Bright Flight administrative rule with the assistance of the CBHE State Student Financial Aid Committee.
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MDHE Commissioner to be a Member of the Missouri Commission on Autism Spectrum Disorders
As signed by Gov. Blunt on June 24, 2008, Senate Bill 768 creates the Missouri Commission on Autism Spectrum Disorders and the Office of Autism Services. Dr. Robert Stein, Commissioner of the Missouri Department of Higher Education, will be a member of the commission. One of the commission's charges will be to develop a recommendation for enlisting institutions of higher education to make sure support and collaboration exist for developing certification or degree programs for students specializing in autism spectrum disorder intervention.
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National News
A brief summary of financial aid related national news items is listed here, along with a link to follow for each for more information. During the past month, the U.S. Department of Education (USDE) posted several announcements and Dear Colleague Letters (DCLs) to the IFAP Web site, including:
Additionally, it is expected that the U.S. Department of Education will release updated Master Promissory Note (MPN) documents for both Federal Stafford and Federal PLUS loans in the near future. Until the new MPNs are posted on the IFAP Web site, the most recent announcement remains DCL FP-08-02, which was posted on January 8, 2008. The 2008 version of the Common Manual has been available since June from www.commonmanual.org. The camera-ready version may be retrieved and printed or the 2008 electronic version may be downloaded.
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A Behind-the-scenes Look at the Customer Services Provided by MDHE Client Managers
MDHE client managers provide proactive customer service to Missouri's FAOs on a daily basis, analyze reports, and assist MDHE's client service representatives. They research and respond to questions brought to our attention by postsecondary schools and answer phone calls on the department's toll free number (800-473-6757, option 2). Client managers spend a great deal of time working the following three reports aimed to allow schools to identify and resolve as many potential processing issues as possible and as soon as possible. Annual Loan Limits and Potential Overawards Report This report provides information to client managers to assist in resolving a school potential overaward by confirming information and updating loans (through verifying loan history on ELM, for example). If that isn't necessary, client managers will contact the schools to notify them of a possible overaward. This report is worked for both schools that use the MDHE guarantee and for schools that participate in the ATOM disbursement process. Application Processing Summary Report Client managers use this report to work loans that are in an incomplete or rejected status due to missing or incomplete information by either 1) contacting the school or lender to get the loans updated and approved, or, 2) if the school requests, terminating the loans if they shouldn't/can't be approved to drop off of this report. This report is worked for both schools using the MDHE guarantee and for schools that participate in the ATOM disbursement process. School Missing MPN Report This report allows client managers to work ATOM loans that have not disbursed due to a missing MPN. They contact the lender/servicer to determine if they have a valid MPN and, if so, the client managers work to get the loan updated so it is approved to disburse or notify the school that certain MPNs are still missing. This report is only worked for schools that participate in the MDHE ATOM disbursing service. In addition to working the reports noted above, client managers are here to help with any other loan issues or questions that a school may have. To sign up for any of these reports, please contact your client service representative or one of our client managers.
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Registration for Fall Workshops Begins August 1
Financial aid staff, lenders, and other interested parties may soon sign up for one of the MDHE's annual fall workshops. The easy online registration process will begin August 1, providing access to free, one-day training sessions on a variety of timely financial aid and student loan topics. The "Growing Strong" themed workshops are slated for four locations throughout the state on the following dates: Kansas City - September 17, 2008 Springfield - September 18, 2008 St. Louis - October 1, 2008 Scheduled topics include:
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School and Lender Updates
Updates to Eligible Lender List Contact: Jill Wilson
CHANGES:
Bank of America, OE 831495 Farmers and Merchants Bank - F & M Bank, OE 814668 Farmers and Merchants Bank has made the decision to no longer subsidize the origination fee effective July 1, 2008. Vantage Credit Union c/o MOHELA, OE 826986
Wachovia, OE 830005
Wells Fargo, OE 807176
DELETIONS: Brazos Higher Education Service Corporation, Inc., OE (Servicer Code) 700208
Central Bank of Lebanon, OE 828826
Phelps County Bank, OE 821154
Midwest Independent Bank, OE 832861
School Updates The following schools are listed on the June 2008 Closed School Report: School of Hair Design
Neosho Beauty College-Class Act 1 School of Cosmetology
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MDHE Offers Complete Line of Publications for the 08-09 Academic Year
The Missouri Department of Higher Education has a longstanding tradition of providing free resources and publications to Missouri's postsecondary institutions, and the 2008-2009 academic year is no different. The recent hubbub of activity surrounding the student loan industry, as well as changes within state financial assistance programs, makes it more crucial than ever that you provide your students with the most up-to-date publications available... that's where we come in! From financial assistance guidance to entrance and exit counseling, from planning for college to financial literacy, MDHE publications are specifically designed to provide students with the information they need to help them succeed. After all, "Building Missouri's future... by degrees" is our goal. All pieces include updated information on interest rates, loan limits, counseling requirements, and repayment options as appropriate. Visit our online publication order form to order any of the items below currently featured in our library.
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Missouri Tops Show Me the Future Players
Missouri once again boasts the highest number of players taking advantage of Mapping Your Future's " Show Me the Future" financial literacy and life skills game. The free, interactive Web journey is designed to help 12- to 20-year-olds prepare for their futures by helping them understand and implement money management concepts such as:
"Show Me the Future" is designed to help students understand that the decisions they make today can have a life-long impact. Players from all 50 states have played the game, with Missouri topping the list for number of participants and Texas and South Dakota rounding out the top three. The MDHE is a proud sponsor of Mapping Your Future - a national collaborative, public-service project of the financial aid industry that brings together the expertise of the industry to provide free college, career, financial aid, and financial literacy services for students, families, and schools.
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Missouri Department of Higher Education
3515 Amazonas Drive, Jefferson City, MO 65109 (573) 751-2361 - www.dhe.mo.gov |