TASFAA Community Blog!

  • 02 Oct 2012 10:18 AM | Anonymous

    Doug Savage, TG Senior Regional Account Executive

    There's little question that the digital age has democratized knowledge. These days, answering a question that once would have required extensive study and research may involve little more than a few clicks. Barriers to knowledge - including distance, expense, and institutional gatekeepers - have in many cases been made obsolete. That's an undeniable upside to the digital age. There is, however, a complementary downside: the sheer quantity of information may make it hard to digest. Data without context can be confusing. As technology historian George Dyson notes, "Information is cheap, but meaning is expensive."

    As applied to the world of scholarships, those two facts - we have improved access to data, but we may not understand what it means - translate to a reality in which it is easier than ever for students to find out about scholarships for which they may be eligible but data saturation may keep them from making good use of available resources. This article aims to help give students a little more sense of the forest rather than the trees.

    Applying for scholarships isn't the same thing as filling out the FAFSA.

    When it comes to financial aid, filling out the Free Application for Federal Student Aid (FAFSA) is generally step one. Why? Because that one step sets students on the path to gaining federal and state aid. That's all great, but students may not understand that it's still a good idea for them to a scholarship search. They'll have heard that FAFSA completion will get them considered for all kinds of aid, and may not have fully digested that most scholarships require students to apply for them individually (rather than filling out one over-arching financial aid application). In practical terms, they may need a nudge to understand that it's a good idea to do a search, select some scholarships which are a good match, and apply as directed.

    Think "free" not "fee."

    There are a number of scholarship search services available for a fee. Students pay money, and the service matches them with scholarships for which they may be eligible. Thinking that the for-fee service must be more tailored to their needs than a free website, students may think the services offer a good value. However, some of these fee-based sites may be scams, and several of the free sites are excellent. These sites have databases that are regularly updated with new scholarships and/or any changes to application processes or criteria. Besides TG's scholarship search engine on its own Adventures In Education (AIE) website, (www.AIE.org/scholarships/), other free and available search engines are provided by:


    Scholarships have varied criteria.

    For many students, the negative voice in their heads will immediately begin squelching enthusiasm, shouting out gloomy pronouncements like "I'm not a straight A student!" or "I'm not an outstanding athlete or artist!" Part of this mission is to shine a light through the gloomy fog, reiterating to students that scholarships have varied criteria. Ranging from unique interests to where one lives to family background to none of the above, scholarship are available to a wide range of people, not just the start atheletes and exceptional scholars. It's in every student's best interest to conduct a search and not dismiss their chances without trying.

    Cutting and pasting may not be the best approach.

    Filling out applications isn't a favorite activity for many people. It follows, as night follows day, that students may be tempted to cut and paste a lot of text from one application into another. That is not the best idea. Why not? Remind students how the criteria vaired! That means that when a student is applying, it is poor audience adaptation to use the same answers for different scholarships provided by different donors who are looking for different things. Explain to students that while they should not misrepresent themselves, it is okay - advisable, in fact - to target answers to the kinds of qualities that best show how the student matches the given criteria.

    Not every scholarship is listed in every database.

    Some scholarships may be new and therefore may not be in every database. Some scholarship information may only be available through a college's website, or through a local civic organization or other local group. Some applications may be offline only. The point is that it's worth checking multiple sources rather than to do one search in one database. Students will benefit from checking with their Financial Aid Office, of course; that would be ideal. Short of that, broadly communicate that using one or more of the online search databases mentioned above is advisable, or that sutdents can check the school's website for informaiton about institutional aid. A little persistence and determination may lead them to an excellent funding source in realizing their college and career dreams.

    In many ways, technology makes this a great time to be a student. Compared to their parents' generation students today have an abundance of easily available information about funding sources. With a little guidance, students can convert that information into meaningful knowledge on which they can act.

     

    Doug Savage is a senior regional account executive for TG serving schools in TASFAA. You can reach Doug at (800) 252-9743, ext. 6711, or by email at doug.savage@tgslc.org. Additional information about TG can be found online at www.TG.org.

  • 12 Sep 2012 2:20 PM | Anonymous

    Both the Senate and House are expected to pass a 6 month Continuing Resolution (CR) for FY 2013 which would fund all discretionary programs through March 27, 2013.  The programs would be funded 0.6% above FY 2012 levels.  This would mean no new programs would be started and no programs would be eliminated.  Please see the NASFAA article at the below link.

    http://www.nasfaa.org/advocacy/News/Congress_to_Pass_6-Month_Spending_Bill_to_Fund_Programs_Through_March_2013.aspx

    http://thehill.com/blogs/on-the-money/appropriations/248615-appropriators-release-clean-six-month-spending-bill

    http://www.politico.com/news/stories/0912/80987.html?hp=l1

  • 11 Sep 2012 9:30 AM | Anonymous

    Linda Peckham, Senior Training Strategist, Great Lakes Higher Education Corporation and Affiliates

    Higher education at large has responded to the social media boon by strategically utilizing Facebook and other platforms to improve admissions, yield, community relations and even alumni giving. Why then, has the financial aid community been slower to respond? Concerns about office resources and how and when to post content are the most common reasons offered by aid leaders when asked about their lack of a social media presence. Ironically, schools with a successful financial aid social media presence have reaped substantial returns on investment with minimal use of staff time when they have deployed a strategic approach to a social media plan.

    "Start with your mission," advised Amanda B Carter, associate director of financial aid at the University of Rochester. "We made the decision to enter the space based on who we are as an aid office and our desire to communicate more regularly with students." The University of Rochester successfully launched a Twitter account for financial aid in January and currently uses it to push out critical information about deadlines and policies. Strategically, they made the decision to only adopt Twitter and to continue to share a Facebook presence with the admissions office. Carter reports that one staff person is responsible for posting tweets and monitoring responses and generally spends about 30 minutes a day on this effort.

    Northeastern University took a broader approach to using social media tools. "Financial aid offices often have a difficult time building trust and good communication with students so we saw social media as an important stategy for us," explains Jim Slattery, Senior Director of Financial Aid. Anya Morozkina, assistant director of communications and administration for the office, and the staff person responsible for the social media presence, concurs, "We wanted to change the perception among the students about the aid office. We are not hte grinches on campus. We want students to know that they can reach out to us and we are ready to help them."

    Morozkina notes that Northeastern's strategy is focused on gaining a larger student audience and improving perceptions about the office. As a result, they have implemented a long term plan for posting content and update their Facebook page every other day. Content updates might include information about broader financial aid topics including articles reposted from NASFAA and other financial aid sources. Morozkina also recommends seeking topical ideas from student employees. "They know what their peers want."

    Liz Gross, director of university marketing and communications at the University of Wisconsin-Waukesha, also encourages aid offices to embrace social media as part of their mission to serve students. "Social media can allow you to inform, connect and make a positive impression. Most aid offices are still thinking about it as only a one-way communication platform." She notes that aid professionals need to think about "the social media space as a community where you can publicly help students solve problems. It's really a way to turn your complainers into your champions."

    Fullerton College has successfully embraced Facebook as an opportunity to improve customer service and student impressions about the financial aid office. Greg Ryan, director of financial aid, notes that their Facebook presence allows them to respond to student concerns within minutes and has resulted in dramatic decreases in phone calls to the office and shorter lines during peak periods. He also reports that over the three years since Fullerton implemented a Facebook page for the office, the amount of time he spends responding has diminished.

    Gross says that Fullerton's experience is exactly what the goal should be for the financial aid office in the social media world: "You need to think about cultivating a community over time so that students begin to answer the questions for their peers. That's what you want in the long run. Students want to hear from other students about how to resolve processing or deadline issues."

    Financial aid offices that have developed a social media presence based on strategy have successfully improved student service and campus perceptions about their office. As Gross sums up, "A social media presence provides public proof that your office is there to help."

    Suggestions for starting your financial aid office social media effort:

    • Start with your mission and build your communication plan from there.
    • Build a semester-long communication calendar so you can plan content in advance.
    • Refresh your content as often as you can--every other day if possible.
    • Use student employees to help write content and respond to posts.
    • Develop a social media policy in advance, including guidelines for how you will handle derogatory comments.

    Readers interested in more information about building a social media presence for their financial aid office are welcome to attend a free webinar on the topic hosted by Great Lakes. Please visit https://www.mygreatlakes.org/web/FAP/training/findAvailableEvents?selected=training for more information or to register.

  • 24 May 2012 10:53 AM | Anonymous
    To: TASFAA Members

    From: Gigi Jones [mailto:jonesg@nasfaa.org]

    Cc:'lennox.alfred@pellinstitute.org'

    Subject: Pell Grant 40th Anniversary SFARN dinner and conference

    I am pleased to extend a dinner invitation to TASFAA members on behalf of The Pell Institute (www.PellInstitute.org), a DC based organization that advocates to improve the educational opportunities and outcomes for low-income, first-generation, and disabled students. This year marks the 40th anniversary of the Pell Grant, and The Pell Institute will commemorate this event at its annual SFARN (Student Financial Aid Research Network) conference with a dinner on Wednesday, June 13 (6:30pm-8:30pm) at the Westin Memphis Beale Street Hotel. The dinner will feature remarks from Clay Pell, IV, the late Senator Claiborne Pell’s grandson; Deborah Northcross, Executive Director, Southeastern Association of Educational Opportunity Program Personnel (SAEOPP); and Jamie Merisotis, President of Lumina Foundation.

    I have been given the two attachments with additional information to share with TASFAA. If you have any questions about the dinner, please contact Lennox Alfred at lennox.alfred@pellinstitute.org.

    It is with hope that you would be so kind as to share this invitation with the TASFAA members who might be interested in attending.

    Kind regards,

    Gigi

    SFARN_PG40_Impact_Dinner_Invitation.pdf

    PG40 Impact Flyer.pdf

  • 14 May 2012 5:24 PM | Anonymous

    Getting Your Hands DRT-Y:  Reflections on Year Two of the FAFSA and the IRS Data Retrieval Tool

    Linda Peckham, Senior Training Strategist, Great Lakes Higher Education Corporation and Affiliates

    When Norman Caito first learned of the requirement that aid applicants pull their IRS data into their 2012-13 FAFSA data online, he was encouraged. “I was thrilled with the concept that I’d be able to review accurate application data early in the awarding cycle,” said Caito, Director of Financial Aid Operations and Services at the University of San Francisco, “At USF, verification of application data is critical to our mission of getting the right funds to the right students.”   

    The process is enabled by the Data Retrieval Tool (DRT), which was designed to pull actual tax return data into the FAFSA to make it easier on families to complete the applicationundefinedand to ease the verification process for aid administrators.  Although the DRT was available in the 2011-12 application cycle, it was not mandatory. Effective with the 2012-13 processing cycle, the Department of Education adjusted the verification requirements to include that certain elements from the FAFSA could only be verified with DRT data, or through the use of an official IRS tax transcript submitted by the applicant.

    Caito and other aid executives have learned the hard way that the regulation may have had the best of intentionsundefinedto simplify verification processes and reduce potential financial aid fraudundefinedbut its implementation has been challenging. Successful adoption of the process has required patience and out-of-the-box thinking, as well as some labor-intensive work-arounds when families are unable to successfully transfer their IRS data to the FAFSA.

    Leslie Limper, Director of Financial Aid at Reed College, shares Caito’s observations. “Verification is very important here at Reed, so we communicated the new information about the DRT to families early and encouraged them to use it.”

    Limper discovered that most families in her applicant pool followed their instructions faithfully and were happy to comply with the new process. However, continued snags between the IRS, the Central Processing System, and sometimes even the U.S. Postal Service resulted in process failures and lag times that have impacted aid offices’ ability to review and verify information in a timely manner. Limper adds: “The things we found out about how to really make this process work, we learned on our own. As a result, we’ve been adjusting our processes and dates all year long to accommodate families and the processing challenges we’ve encountered.”

    Susan Fischer, Director of Student Financial Aid at the University of Wisconsin-Madison, says the new process has presented a new “balancing act between administrative burden and good customer service to families.” Her team spent many hours revising processing and verification requirements at the beginning of the year to ensure that their office could meet processing deadlines and help families with the new approach. “We are dancing as fast as we can,” says Fischer, who cautions fellow aid administrators to find the most efficient way to verify data and disburse aid prior to the academic year.

    According to Caito, Limper, and Fischer, some of the most common problems that families encounter with the DRT include: 

    • IRS data not being available for transfer within the 2-3 calendar days that had been promised (thus FAFSA processing was delayed).
    • Delays in receiving IRS transcripts when requested because of address match issues.
    • DRT or transcripts not being available to those who owed money to the IRS for 2011.
    • Delays in the availability of either the DRT or the transcript request for taxpayers who filed towards the end of the cycle in April.

    To reduce some of the administrative burden caused by processing delays, the Department of Education recently adjusted its guidance to allow schools to use paper tax returns to verify data for filers “who have unsuccessfully attempted to use the DRT or obtain a transcript” until July 15th. But many schools are continuing to ask families to use the tool or the transcript anyway. “The process is here to stay and we’d rather have families stay on this path whenever possible,” says Heather McDonnell, Associate Dean of Financial Aid and Admissions at Sarah Lawrence College.  

    Thinking ahead to next year, aid colleagues suggest the following tips to help better prepare your applicants for the DRT or transcript request process:

    • Clearly explain the DRT process to parents on your initial verification document or institutional application and ask them to “check off” which process they intend to use (DRT, transcript request, or non-tax filer status). Use this data to help track application results in your FAMS system and send targeted follow-up messages to families as needed.
    • Remind parents that the DRT or transcript request process works faster if they file their tax returns electronically, rather than by paper.
    • Inform joint tax filers that the IRS will only recognize data transfer requests from the filer whose name is first on the tax return and/or whose IRS PIN is being used to identify the IRS record.  As an example, if the mother is helping the student file the FAFSA, but is not listed first on the parental joint tax return, and attempts to access and complete the IRS data transfer site, the IRS will neither recognize nor approve the data transfer.
    • Remind families that although FAFSA guidance indicates that the DRT or the transcript should be available around three weeks after they have filed, this timeframe is extended towards the end of the federal tax deadline in April. If FAFSA filers wait until April to file their returns, they can expect that the DRT or transcript request will take up to six weeks to process.
    • Explain that when requesting a paper transcript, the filer’s mail address must exactly match what the IRS system has on file. In cases where the postal service has abbreviated addresses or the filer has moved, the IRS may delay sending out a transcript until the issue is resolved.

    ###

  • 16 Apr 2012 1:40 PM | Anonymous

    Publication Date: April 16, 2012

    DCL ID:     GEN-12-07

    Subject: Acceptable Documentation for Verification

    Summary: This letter updates the guidance provided to institutions concerning the documentation they must obtain to verify income and tax information.

    Dear Colleague:

    As of mid-April 2012, over two million students and parents have successfully used the IRS Data Retrieval Tool, making the 2012-2013 FAFSA verification process easier and quicker for them and reducing the administrative burden on thousands of institutions. In addition, hundreds of thousands more applicants have received and submitted to their schools IRS Tax Return Transcripts. As the April tax deadline approaches, we are aware that some students and families may not be able to immediately use the FAFSA-IRS Data Retrieval Tool or to obtain IRS Tax Return Transcripts needed to complete the verification process primarily because of the large volume of tax returns coming in at this time of year.

    In the limited set of cases where an aid applicant, who has filed a tax return and attempted unsuccessfully to use the IRS Data Retrieval Tool or to obtain IRS Tax Return transcripts, needs a timely alternative for meeting the 2012-2013 verification requirements, institutions may, until July 15, 2012, use a signed copy of the relevant (i.e., applicant, spouse, or parent) 2011 IRS Tax Return (Form 1040, 1040A, or 1040EZ, as appropriate) as acceptable verification documentation for the 2012-2013 award year.

    After July 15, 2012, institutions must comply with the acceptable documentation requirements included in the July 13, 2011 Federal Register notice and in DCL GEN-11-13.

    The Department will require some institutions to obtain verification documentation in compliance with the current acceptable documentation requirements for a sample of the institution’s students whose information was verified using a paper copy of a tax return.

    As noted, more than two million applicants and parents have successfully used the IRS Data Retrieval Tool to directly transfer IRS information into their FAFSA, vastly simplifying the process of applying for financial aid. Consequently, it remains important for institutions to communicate to all applicants that using the tool -- either when initially completing a FAFSA or by using the corrections functionality of FAFSA on the Web -- provides them with the fastest, easiest, and most secure solution for meeting verification requirements.

    We remain committed to our goal of enhancing the verification process and will continue to work with the financial aid community toward that goal.

    Sincerely,

    David A. Bergeron

    Deputy Assistant Secretary for

    Policy, Planning, and Innovation

    Office of Postsecondary Education 
  • 05 Apr 2012 8:37 AM | Anonymous

    Borrower boot camp: Get your graduates in repayment shape with these five tips

    Doug Savage, TG Senior Regional Account Executive

     

    Say you had the chance to send next semester’s graduates through a “basic training” in loan repayment - a regimen that taught them not only the essentials of responsible repayment, but offered tips on safeguarding their finances in a tough economy. What would you include in the course? How would you help borrowers focus on lean living, building financial muscle, and preparing for the endurance test that is, in essence, repayment?

     

    Here is an “exercise plan” designed to suggest to borrowers a successful path to loan repayment. You could include many things in such a plan; this version offers just an example. Consider adapting these suggestions for your own campus needs, using the information as a supplement to exit counseling, or  including it in future communications by mail or email.

    • Build your budget muscle - Strong, well-planned budgets do the heavy lifting for short- and long-term fiscal needs. To make sure income is put to “healthy” use, borrowers will need to establish a budget that takes adversity into consideration - a lay-off or prolonged job hunt, for example. There are numerous online calculators and off-the-shelf personal finance software applications that make creating and using a budget simpler. The more borrowers can anticipate and plan for their expenses in a budget - and adhere to budget requirements with the occasional splurge as a reward - the better off they’ll be.
    • Watch those spending calories - The temptation after getting a job and jumping several income brackets is to overindulge. Graduates used to a student’s Spartan existence may want to upgrade lifestyles without preparation; that is, without setting a spending plan. Instead of buying heedlessly, which can leave borrowers vulnerable to credit problems, they should devise a simple spending plan of purchases matched to income “calories” that takes into account long-term life goals.  Such a plan can help borrowers cut unnecessary expenses and focus on saving.
    • Track loan “weight” via NSLDS - For a “weight scale” view of where borrowers stand with regard to repayment, the National Student Loan Data System (NSLDS) website (http://www.nslds.ed.gov/nslds_SA/) is invaluable. The site won’t be up-to-the-minute with loan amounts and statuses - for that, borrowers will have to contact individual servicers. But the site does offer a central place to track loan calories burned and find contact information for all loan holders. The site can be especially useful for borrowers with split loans.
    • Set a long-distance goal with a repayment plan - Half the battle with any lengthy endeavor like repayment is setting a goal that is appropriate given need and circumstance. The standard repayment plan is not always the best for some borrowers, given dramatic changes in income or a period of time without employment. In such cases, borrowers may do well to consider Income-Based Repayment or another plan that takes into account fluctuations in salary.
    • Talk to your repayment coaches, a.k.a., servicers and guarantors - Servicers and guarantors can offer guidance and information to borrowers in tough financial straits. They can also connect borrowers to such repayment options as forbearance and deferment, and explain the pros and cons of loan consolidation.

    For help

     

    For more suggestions on what to include in your basic training content for borrowers, contact your colleagues in the field, including guarantors. Guarantors work in all phases of the life of the loan and will likely have materials and ideas on what borrowers should keep in mind as they begin repayment.

     

    Doug Savage is a senior regional account executive with TG. You can reach Doug at (800) 252-9743, ext. 6711, or by email at doug.savage@tgslc.org. Additional information about TG can be found online at www.tg.org.

  • 15 Mar 2012 9:39 PM | Anonymous

    Is Income-Based Repayment the Best Option for My Students?

     

    You’ve heard a lot about Income-Based Repayment, or IBR, but is it a one-size-fits-all solution for every student loan borrower? Below are some things to consider as you advise your current and former students on this repayment option.

     

    IBR Has Benefits

    Under current provisions, the benefits of IBR include a lowered monthly payment amount, currently capped at 15 percent of the borrower’s discretionary income, and forgiveness of any balance that remains after 25 years and 300 payments. If the borrower is eligible for Public Service Loan Forgiveness, that forgiveness may take place after just 10 years. Additionally, if the borrower’s IBR payment does not cover the interest accruing on any subsidized loans, the government will pay the remaining interest for up to three consecutive years from the date the borrower begins IBR. 

     

    IBR Also Has Drawbacks

    IBR can be more expensive for the borrower in the long run. The lowered payments can cost the borrower more interest over the life of the loan, thoughundefinedin most casesundefinedthe increase in interest will be less than the late fees and collection costs of a defaulted loan. Also, if the borrower’s income rises to the point that they no longer qualify for the lowered IBR payment, their payment will return to the standard payment level, and the borrower will begin to make more progress toward paying down their balance. 

     

    Identify Borrowers Who Benefit Most from IBR

    While IBR isn’t the right option for every borrower, it is a plan that may work well for those with lower earnings, relative to their debt, looking for an affordable payment based on their income and family size. It is also a good option for borrowers entering public service careers, as they could also take advantage of Public Service Loan Forgiveness, and receive loan forgiveness sooner. 

     

    Not Every Borrower is Eligible

    To qualify for IBR, borrowers must demonstrate a partial financial hardship. This means that their annual student loan payment amount is more than 15 percent of the difference between adjusted gross income and 150 percent of the poverty line for their state and family size. If the calculated IBR payment is lower than the borrower’s payment under the 10-year standard repayment plan, they qualify.

     

    Not Every Loan Type is Eligible

    IBR-eligible loans include FFELP and Direct Stafford, Grad PLUS, and Federal Consolidation loans, as well as Perkins loans included in a FFELP or Direct consolidation loan. However, Parent PLUS loans, consolidation loans that include a Parent PLUS loan, private and alternative loans, and defaulted loans are not eligible.

     

    IBR Forgiveness Amounts Will Be Taxed as Income

    As the regulations stand now, the forgiveness amount will be taxed as income. There has been legislation proposed to change this, but it has not made progress in congress since its introduction.

     

    Changes to IBR Are on the Way

    New borrowers, on or after July 1, 2014, will be eligible for two new IBR provisions. First, their payment will be limited to only 10 percent of their discretionary income, rather than the current 15 percent. Secondly, they will be eligible for forgiveness after 20 years, instead of 25.

     

    The IBR Application Must Be Completed Annually

    Borrowers must apply for IBR every year in order to receive reduced payments, and the application can be tricky to complete correctly. Some tips to help ease the process:

    • To offer proof of adjusted gross income, borrowers can submit a copy of their tax return or complete a 4506-T, or, if they are non-tax-filers, they may be required to submit other forms of documentation.
    • When married borrowers who file their taxes jointly, both spouses’ income and federal loan debt will be considered in the eligibility calculation. If they file separately, only the applicant’s income and debt will be considered. 
    • The family size includes the borrower, his or her spouse, children, unborn children, and others who live with and receive greater than 50 percent of support from the borrower during a given year. The applicant must recertify this number each year, or it will default to a family size of one.

    Understanding IBR is the key to making sure that this option is matched with the borrowers who can benefit most. IBR may not be the best option for every borrower, but for some it can be an ideal solution for making student loan payments more manageable in the long run.

    Dave Bowman is a Regional Marketing Director with Great Lakes, serving schools in TASFAA. You can reach Dave at (888) 685-1604, or by e-mail at DBowman@glhec.org. Additional information about Great Lakes can be found online at www.mygreatlakes.org

  • 14 Mar 2012 1:33 PM | Anonymous

    Dear Financial Aid Colleagues:

     

    When Governor Bill Haslam released his proposed FY 13 budget to the General Assembly it he included an increase of $6.6 million for the Tennessee Student Assistance Award (TSAA).   This is more than double last year’s request.   $3.2 million is being recommended in the State’s core services budget and another $3.4 million is proposed in general appropriations.  If the additional grant funds are appropriated, over 3,000 additional students could be served for this upcoming fall semester.

     

    Additionally, both the recommended appropriations are in the ‘recurring’ column rather than the ‘non-recurring’ or one-time column. Consequently, if the improvements are adopted, it increases the program’s annual base funding for future budget considerations.

     

    In order to help ensure that these improvements are passed by the Tennessee General Assembly, we need our TSAA recipients to send a ‘thank you’ notes for the grant program to their elected officials.  Please do all you can to send your students to the Tennessee Student Aid Alliance website in order to send their notes of thanks electronically.  It’s a very easy process that will only take a few moments of their time but may result in millions added to the TSAA program.

     

    Here’s the TN Student Aid Alliance link:  http://savestudentaid.tnsaa.org/5819/take-action-support-tennessee-students/

     

    Or go to www.tnsaa.org and click on Action Center.

     

    Please feel to contact me!

     

    Claude

     

    Dr. Claude Pressnell

    President

    Tennessee Independent Colleges and Universities Association

    1031 17th Avenue South

    Nashville, Tennessee 37212

    615-242-6400, ext. 201 direct voice line

    615-242-8033 fax

  • 07 Feb 2012 10:51 AM | Anonymous

    Reviewing the Accuracy of Your Cohort Default Rate Reports

    By Dave Bowman, Regional Marketing Director

    Great LakesEducational Loan Services, Inc    

    Recently, the first draft three-year cohort default rates (CDRs) were sent to schools. The switch from a two-year rate to a three-year rate means that this calculation includes an additional year of defaulted loans. The draft calculation includes the percentage of borrowers who first entered repayment between October 1, 2008, and September 30, 2009, who subsequently defaulted on or before September 30, 2011. With the additional year included, almost every school is seeing a higher three-year CDR.

     

    The draft three-year rates are for informational purposes only and are not challengeable. However, the Department of Education has provided them to give schools a preview of what to expect once the three-year rates become real. While not every school will need to challenge the information used to calculate their three-year rate once they are officially released, every school should want to ensure that its newly-released rate is accurate and become familiar with the challenge/appeal process before next year. Take time to make sure that correct information was used to calculate your school’s CDR, so that your official rate, when released, is as accurate as possible.

     

    Know what the cohort default rate package contains.

    The cohort default rate package comes to you in an electronic format and arrives via the Student Aid Internet Gateway, and is issued in early February of each year. You will find a cover letter and two types of Loan Record Detail Reports (LRDR), the extract-type and the reader-friendly version. The extract-type file is best used for loading CDR data into a database while the reader-friendly version is best used for schools that wish to simply view the information.

     

    Know how to read the LRDR.

    Many of the challenges that are submitted to the Department every year are unwarranted. Save your school time and effort by ensuring you are reading your school’s LRDR correctly.

     

    The LRDRundefinedcreated for the Department by the National Student Loan Data System (NSLDS) using the information that schools, data managers, and various offices within the Department have submitted to the NSLDSundefinedlists specific information for each loan that was included in your school’s CDR.

     

    In addition to demographic information about your school, you will be able to find information about the borrowers included in the CDR calculation, and the date the CDR was calculated.

     

    Be aware of the codes used by the Department on this form, including:

    ·         Loan type codes

    ·         Enrollment status codes

    ·         Usage codes

    ·         Claim reason codes

    ·         Loan status codes

    ·         Academic level codes

    ·         Data manager codes

    ·         Guarantor/Servicer

    More information about theses codes is available at http://ifap.ed.gov/DefaultManagement/guide/attachments/Ch2pnt3LRDRpt2.doc, page 2.3-7 and 8.

     

    Know what actions to take.

    Save a copy of all of your school’s LRDRs:

    ·         To use in the event of a challenge, adjustment, or appeal

    ·         To compare draft and official rates

    ·         To compare rates from one fiscal year to the next

    Also, take the time to review the accuracy of the data used to calculate the draft CDR.  Compare the information in the LRDR to your school records to ensure that the students on your system match those listed in the report.

     

    Take action if you find an error.

    If any of the information used in the draft rate is inaccurate, your school should file the appropriate challenge. Be aware that a school that fails to challenge the accuracy of its draft CDR may not contest the accuracy of the data in the official CDR. Incorrect data can be resolved by taking these steps:

    ·         Locate the Guarantor/Servicer number on the LRDR, and use it to obtain the name and address of the data manager who is responsible for the loan. You will need to have this information in order to submitting a challenge, adjustment, and/or appeal. Be aware that there could be a cost for review of your information by a servicer.

    ·         There are several categories of errors, and it is important to find the correct category for the error you have found. Note that incorrect data challenges apply to the draft rate, while adjustments and appeals apply to the official rate. More information on these categories can be found at http://ifap.ed.gov/DefaultManagement/CDRGuideMaster.html.

    ·         You must use the eCDR Appeals System to submit a draft rate challenge. The eCDR process includes registering for a user account, creating an organizational and individual profile, creating a new case, uploading the applicable LRDR extracts, adding detail, and submitting the case.

    ·         If additional documentation is requested, you will be contacted via email by the data manager or the Department of Education, depending on the type of challenge or appeal.

    Analyze your default management plan

    Always take the time to look at the borrowers from your school who have defaulted. What do borrowers who have defaulted have in common, and how do they compare to your broader student body? Think about what steps you could take to lower your default rate, so that your school can avoid sanctions and benefit from a lower CDR, and your former students can avoid the consequences of default while building a more solid financial future.

     

    Dave Bowman is a Regional Marketing Director with Great Lakes, serving schools in TASFAA. You can reach Dave at (888) 685-1604, or by e-mail at DBowman@glhec.org. Additional information about Great Lakes can be found online at www.mygreatlakes.org

Loading

Contact Us: administrator@tasfaatn.com

 

Powered by Wild Apricot Membership Software