In this issue:
General News | Featured Tool | College Planning | Who's Who | Financial Aid
Scholarships & Other Aid Opportunities | Financial Literacy | Student Loan Management | Calendar
General News
Ask the Expert: New Changes to Federal Pell Grants and Student Loans
July 1 of each year marks the beginning of the federal aid year, as well as the beginning of the academic year for many schools. This year, changes have been made to both the Pell Grant program and student loans.
Federal Student Aid Eligibility. First-time students who enroll on or after July 1 will need one of the following to be eligible for federal aid, including grants, loans and work-study:
- High School Diploma
- GED
- Home-School Graduation Documentation
Students enrolled prior to July 1 are not affected by this change.
FAFSA Expected Family Contribution. Beginning July 1, families will need an adjusted gross income at or below $23,000 to receive an automatic $0 Expected Family Contribution as calculated by the Free Application for Federal Student Aid (FAFSA).
Pell Grant Eligibility. All students, regardless of enrollment date, may only receive Pell for a maximum of 12 equivalent full-time semesters. Transfer and returning students are also affected by this change, even if they've previously received Pell funds under the 18-semester rule.
Federal Student Loans. Subsidized Stafford Loans disbursed on or after July 1 will continue to have an interest rate of 3.4 percent through 2012-13. (Legislation has not yet been passed to continue this rate for 2013-14 and beyond.) The fixed interest rates for Unsubsidized Stafford, Graduate PLUS and Parent PLUS loans remain the same as 2011-12 at 6.8 percent, 7.9 percent and 7.9 percent, respectively.
Subsidized Stafford Loans disbursed on or between July 1, 2012 and June 30, 2014 do not include a grace period interest subsidy. During this two-year period, interest will accrue during the six months immediately following a student's graduation, withdrawal or drop to less than half-time enrollment. If the student doesn't pay the interest during this time, it will be capitalized at the end of the grace period. However, loans issued prior to July 1, 2012 and after June 30, 2014 will retain a grace period interest subsidy, provided further legislation is not passed.
Graduate and professional students are no longer eligible for Subsidized Stafford loans. However, these students may receive the same Stafford annual maximum loan amount as unsubsidized loans. All loans first disbursed on or after July 1 to graduate or professional students will accrue interest while in school, during the grace period, and during periods of deferment. If the student does not pay the interest as it accrues, it will be capitalized.
Direct Loans first disbursed on or after July 1 are no longer eligible for repayment incentives and origination fee rebates, excluding the .25 percent interest-rate reduction for borrowers who opt for automatic payment from a bank account.
More information about student loans can be found at
ifap.ed.gov (external class).
Constitution and Citizenship Day: Campus Requirements and Activities
Constitution and Citizenship Day is a day for Americans to reflect on the Constitution of the United States and its impact on our lives. It's also a day to appreciate and acknowledge our rights and responsibilities as citizens. Constitution and Citizenship Day, a combination of Citizenship Day and the beginning of Constitution Week, is observed on September 17 or on the preceding or following Friday or Monday if the 17th falls on a weekend.
Constitution and Citizenship Day was enacted with the passage of the Consolidated Appropriations Act of 2005. Federal regulations state that educational institutions including, but not limited to, local educational agencies and higher education institutions that receive federal funding are required to have a program in place for observance of this day. For more information, see the Federal Register notice dated 5/24/2005 (external class).
With that in mind, does your institution have activities planned for Sept. 17? Need any help developing a program? If so, visit OCAP's Constitution and Citizenship page (external class) where you'll find age-appropriate quizzes and links to valuable resources that provide information about the Constitution and what it means to be a U.S. citizen. You may even want to click on the citizenship quiz link yourself to brush up on all the information you thought you knew!
If you have suggestions or recommendations for Constitution and Citizenship Day activities, please email them to communications@ocap.org.
Top 5 Reasons to Attend OCAP's Conference
The OCAP annual conference, 10.11.12—Counting on a Bright Future, is still a few months away, but that doesn't mean you can't start getting ready. Here are the top 5 reasons you should put the OCAP conference on your calendar today.
5. It's free. And it's not just the conference that's free. You'll also get free snacks, free lunch AND free OCAP swag!
4. There's something just for you. Are you a high school counselor, GEAR UP site adviser, college recruiter, financial aid officer, social service provider or financial literacy educator? If so, we're planning multiple sessions with you in mind. You'll be able to request publications and browse the wide range of OCAP and OSRHE resources to help you succeed. We'll even be announcing a new service and new materials - you won't want to miss it!
3. Network with like-minded professionals. We're providing several opportunities to participate in panel discussions with your peers so you can exchange great ideas and learn about best practices from your colleagues. You'll get to spend a day out of the office with people who are just as passionate about student success as you.
2. The keynote speaker rocks. This year's keynote speaker is Greg Darneider, senior adviser to the Secretary on the College Access Initiative for the U.S. Department of Education. Mr. Darneider's vast experience in college access, student development and college and career preparation will be a great addition to our conference!
1. We're bringing the experts to you. Whether your focus is default management, working with underserved populations, engaging students and parents, teaching financial literacy, enrolling students in Oklahoma's Promise, working with adult learners or helping tribal students identify resources, you'll walk away with tons of new ideas to help your students plan, prepare and pay for education after high school.
With all those reasons to attend, we know you won't want to miss a moment. Space will be limited this year, so mark your calendar and watch for registration information in September. We can't wait to see you there!
Featured Tool
2012-13 Interest Rate Poster 
The interest rates haven't changed, but the poster has! Free copies of OCAP's interest rate poster for July 1, 2012 - June 30, 2013 are now available upon request.
The interest rate poster provides the 2012-13 interest rates for Federal Direct Stafford and PLUS loans disbursed on or after July 1, 2012. Note that as of July 1, subsidized loans for graduate students are no longer available. Read more about this and other July 1 changes to federal student aid in the Ask the Expert article in this newsletter.
To request a free interest rate poster(s) to post in your office, school or agency, contact us at 866.443.7420 (toll-free) or communications@ocap.org. The poster is also available for free download at OCAP.org (external class).
Who's Who
Do You Know Scott DeBoard?
Meet Scott DeBoard, Training Specialist for OCAP.
What's your role with OCAP?
I'm a Training Specialist in the Policy, Compliance, and Training division. Primarily I work with colleges, universities, and technology centers to assist with Title IV training. I work with schools to develop in-person Entrance and Exit Loan Counseling sessions, give presentations to non-financial aid staff about the basics of Title IV aid, and answer regulation-related questions. I also work with schools to develop and present training on Title IV topics. Additionally, I'm working with the default prevention team's initiative to help schools develop default prevention and student loan management plans.
Tell us about your background. What brought you to OCAP?
Prior to OCAP, I worked in the financial aid offices at the University of Central Oklahoma and Oklahoma State University. My position at OCAP is a natural extension of that work. I hope to assist schools in keeping up-to-date with ever-changing federal regulations and help them train their financial aid staff.
What do you like most about your job?
I really enjoy finding ways to work more efficiently and effectively. Helping financial aid offices streamline their operations so they can spend more time working directly with students is very rewarding.
What can you tell us about the Default Prevention and Management Plan?
With the introduction of Three-Year Cohort Default Rates (CDR) in lieu of the Two-Year CDR's that were used for many years, schools are dealing with an increased number of borrowers who are defaulting on their student loans. When a school's CDR crosses a certain threshold, the school is required to implement a Default Prevention and Management Plan as part of an overall strategy to reduce the default rate. Other schools are interested in developing and implementing a default prevention plan as part of their ongoing strategy to keep the CDR as low as possible. Our goal is to work with schools in developing and executing these plans. OCAP offers a number of resources to help schools identify, contact and educate borrowers about successful student loan repayment. We also hope to identify and educate borrowers earlier in their collegiate career about the importance of limiting borrowing to the minimum amount needed to get them through school.
How can schools take advantage of OCAP's Default Prevention and Management Plan consultation service and Title IV training opportunities?
Contact us at 405.234.4233, 800.442.8642 (toll free) or sdeboard@ocap.org to discuss our services, ask questions or plan a consultation meeting or training workshop.
College Planning
What's New at UCanGo2?
Have you visited UCanGo2.org (external class) recently? If not, we're pleased to announce a great new feature. OCAP has added a scholarship button that will link you and your students to a surplus of college scholarships right from the website. The button can be found on UCanGo2's homepage, as well as on the Student, Parent and Resources pages.
When searching for scholarships using our new button, students may sort by deadline or category. For example, all of the scholarships listed provide a deadline date, so students can keep track of the amount of time they have to apply and submit their applications accordingly. The category feature divides the scholarship links by origin and/or eligibility factors. Some scholarships may 
be corporate-sponsored or community and civic service awards, while others may be based on special needs, challenges or disabilities. Other listing groups reflect minority or gender-based programs. This site provides links to a number of free scholarship search websites that families can access when looking for money for college and lists several places to check for scholarships in the community, as well. It's a great resource to help your students find scholarship opportunities!
OCAP works collaboratively with the Oklahoma State Regents for Higher Education to offer this scholarship information to you. You may currently be accessing this data directly from the OKcollegestart.org (external class) website, and you and your students now have another venue to find free money for college.
We encourage you to link to UCanGo2.org (external class) on your school's website, which will allow your students quick access to all of the scholarship and college planning information UCanGo2 has to offer. For more information about preparing for college, call 405.234.4239, 866.443.7420 (toll-free) or email us at UCanGo2@ocap.org.
Cruising into College Fairs
It's back-to-school time again and that means it's college fair season! UCanGo2 knows that college fairs are important events for students, and we want to make sure they're beneficial. We're offering our College Fair Worksheet (PDF) (external class) for use during the upcoming fairs in your area. This helpful tool provides sample questions and topics students can discuss with campus representatives to ensure the fair experience is as informative as possible.
We also offer a wide variety of other publications and resources to help you put college planning information into the hands of students. Check out UCanGo2.org (external class) to see what else is available, including:
- Checklists with timely tips to help students plan, prepare and pay for college.
- Tools to help students make the most of campus visits.
- Financial aid information and a FAFSA presentation package.
Feel free to download and make copies of the tools provided at UCanGo2.org (external class), or we can provide up to 250 copies upon request. If you have questions or would like to order College Fair Worksheets and/or other materials for an upcoming event, contact us at 405.234.4239, 866.443.7420 (toll-free) or UCanGo2@ocap.org.
The UCanGo2 team will have a booth at nearly every college fair this year, so encourage your students to stop by the OCAP table for free materials. See you there!
Financial Aid
Title IV Eligibility for Students Without a High School Diploma
The Consolidated Appropriations Act of 2012 (Public Law 112-74) amended the Higher Education Act by eliminating three of the four alternatives to a high school diploma, or its recognized equivalent, in establishing eligibility for Title IV financial aid.
As a result, students first enrolling in college on or after July 1, 2012 who do not have a high school diploma or its equivalent can no longer be awarded Title IV financial aid on the basis of:
- Passing an ability to benefit (ATB) test.
- Successfully completing at least six credit hours, or equivalent, that apply toward a degree or certificate offered by the school.
- Completing a state process approved by the U.S. Department of Education.
Students who were admitted to college prior to July 1, 2012 are generally not affected by this change. However, the school must document that the student qualifies to use one of the previous alternatives. Dear Colleague Letter GEN-12-09 (external class) provides a grandfathering test and includes several enrollment scenarios that illustrate the conditions under which such a student may continue to receive Title IV financial aid.
The "recognized equivalents of a high school diploma," as outlined in 34 CFR 600.2, remain unchanged and include:
- A General Educational Development Certificate (GED);
- A State certificate received by a student after the student has passed a State-authorized examination that the State recognizes as the equivalent of a high school diploma;
- An academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree;
- Documentation that a student who is seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and who has not completed high school has excelled academically in high school and has met the formalized, written policies of that postsecondary institution for admitting such students; or,
- The student's completion of a secondary school education in a homeschool setting that is treated as a homeschool or private school under State law and has obtained a homeschool completion credential. Or, if State law does not require a homeschool student to obtain a homeschool credential, completion of a secondary school education in a homeschool setting that qualifies as an exemption from compulsory school attendance requirements under State law.
Financial Aid Shopping Sheet
In Dear Colleague Letter GEN-12-12 (external class), published July 25, the Department of Education (ED) announced the new Financial Aid Shopping Sheet format and asks schools to begin using this tool beginning with the 2013-14 award year. The purpose of the Shopping Sheet is to help students understand the amount of grants and scholarships they would receive and how much the school recommends the student borrow.
Use of the Shopping Sheet is not required, but its use is being strongly encouraged by the Obama administration and the Secretary of Education. The Dear Colleague letter provides a link to a letter sent to college presidents requesting voluntary adoption of the form, as well as a link to the model form. ED requests schools who intend to use the form to email ShoppingSheet@ed.gov with the institution's name and OPE ID number.
What's New on IFAP?
Dear Colleague Letters
E-nnouncements
FAFSA
- August 1 – Issue Alert: FAFSA on the Web Issue Preventing Marital Status Change on 2012-2013 Corrections to be Resolved in Early August 2012
- July 20 – Acceptable Documentation for Verification of 2011 IRS Information(external link)
- July 16 – Publication of Federal Register Notice on 2013-2014 Award Year FAFSA Verification(external link)
Gainful Employment Electronic Announcements (GEEA)
- July 6 – GEEA #39 - Status of GE Regulations
General
- July 27 – 2012 FSA Fall Conference Information
- July 27 – Errata and Updates - Volume 3 - Calculating Awards and Packaging [2012-2013 FSA Handbook]
- July 23 – Issue Alert: 2012-2013 Federal Pell Grant LEU Postscreening Generating SAR/ISIR Transactions for Non-Pell-Eligible Students
- July 20 – Volume 2 - School Eligibility and Operations [2012-2013 FSA Handbook]
- July 17 – Subject: NPRM - Title IV Student Loan Programs
- July 11 – Errata and Updates - Application and Verification Guide [2012-2013 FSA Handbook]
- July 05 – Volume 6 - Managing Campus-Based Programs [2012-2013 FSA Handbook]
Loans
- July 10– Direct Loan Interest Rates and Changes to Student Eligibility for the Direct Subsidized Loans3
Common Manual Update
The latest version of the Integrated Common Manual is available on the Common Manual website. (external class) As always, if you have questions about the manual, contact our Policy, Compliance and Training department at 405.234.4432, 800.247.0420 (toll free) or pct@ocap.org.
Scholarships and Other Aid Opportunities
The Horatio Alger Oklahoma Scholarship Program provides financial assistance to Oklahoma students who have exhibited integrity and perseverance in overcoming personal adversity and who aspire to pursue higher education. Eight $5,000 scholarships will be awarded this academic year.
To be eligible to apply for the Horatio Alger Oklahoma Scholarship, applicants must meet the following criteria:
- be enrolled full-time as a high school senior in Oklahoma, progressing normally toward graduation, and planning to enter college no later than the fall following graduation;
- have a strong commitment to pursue and complete a bachelor's degree at an accredited institution located in the United States (students may start their studies at a two-year institution and then transfer to a four-year institution);
- critical financial need ($50,000 or less adjusted gross income per family is preferred; if higher, an explanation must be provided);
- involvement in co-curricular and community activities;
- demonstrate academic achievement (minimum grade-point average of 2.0);
- be a resident of Oklahoma; and
- be a citizen of the United States.
Learn more about the Horatio Alger Oklahoma Scholarship Program at www.horatioalger.org/scholarships/program_ok.cfm (external class), and find more scholarship programs on UCanGo2's Scholarships page (external class).
Financial Literacy
Back to School Savings: Kindergarten to College
From kindergarten to college, there are many ways to save money at the start of the school year. Whether you're looking to boost your own savings or help a client stretch those limited dollars, try these tips to ease the financial pinch of back-to-school shopping.
Prioritize, budget and shop sales. It seems the summer goes by too quickly, and the new school year sneaks up on us. Planning ahead can help reduce the financial shock factor at this time of year.
Start by making a shopping list. Prioritize by need and include everything from clothes to lunch items. Be sure to inventory what you already have so you won't waste money on duplicates.
Next, prepare a realistic budget. It's a good idea to browse prices online, look for coupons and sign-up for email notifications about big sales. Once your budget is set, stick to it!
For next time, consider shopping throughout the year for school supplies and bulk items, which can help you save money in the long run. If you're buying clothes for growing kids, buy items during off-season sales in the next size up.
Get thrifty! With a little research, time and creativity, you can find many ways to save on all your back-to-school needs. Start by maximizing your free options and then work your way up the price ladder. Only buy new or non-discount items if you've tried all other options.
- Textbooks. Many local libraries carry common college textbooks. Get your books for free by checking them out when classes begin. If borrowing isn't an option, consider buying used books online, renting books, or downloading digital books on your e-reader or smartphone. Sites like Amazon.com (external class), Half.com (external class), eBay.com (external class), Craigslist.org (external class), and Rehash.com (external class) sell used books and offer buyback or sellback programs, too.
- Clothes and Supplies. New clothes can be particularly expensive. Consider hosting a back-to-school clothes swap with friends or other parents. (Be sure to remind your guests to limit offerings to slightly worn items that are free of stains and holes.)
Vintage looks are in right now, and there's no better place to find one-of-kind items than thrift stores and resale shops. You may have to dig for the perfect piece, but the savings can be worth the effort. Be sure to check out Pinterest.com (external class) for thrifty ideas, too. If you have clothes or other items from last year that are still usable, give them a fresh look by pairing them with inexpensive accessories.
- Big ticket items. There may come a time when you'll need to purchase pricier items like a computer, software, graphing calculator, camera or musical instrument. Even these expensive items can be purchased for less.
Look for used or refurbished goods and ask for student discounts. If you must buy new, explore buying directly from the manufacturer; often, not only will you get a student discount, but the base price is often less than department store prices.
To save more in the long-run, consider spending more for high-quality products that you won't have to replace as often. Also, think about purchasing warranties for more expensive items.
Student Loan Management
Restoring Eligibility for Financial Aid After a Default
Defaulting on a federal student loan carries heavy consequences, potentially including wage and tax refund garnishment, a damaged credit rating and loss of Title IV aid eligibility. For students who have not yet completed a degree, the loss of federal aid can have a significant negative impact on their academic career.
Fortunately, loss of Title IV aid eligibility as a result of loan default doesn't have to mean the end of the road to higher education. Students who'd like to return to school after default have several options.
The Satisfactory Repayment Program allows students to re-establish federal aid eligibility by making full payments each month for six consecutive months. The student can't miss a payment during this six month period, and every payment must be made within 15 days of the due date. Wage or tax refund garnishments do not count toward the six consecutive, on-time payments, and the student can't pre-pay in lump sums. This program is a one-shot opportunity, so if the student is more than 15 days late on one of the six payments or fails to maintain satisfactory repayment after regaining Title IV eligibility, access to federal aid funds will be revoked and the student will not be able to receive aid through the Satisfactory Repayment Program again.
Loan Rehabilitation restores the student's loan to satisfactory repayment status and removes the negative credit report rating. Since the loan is no longer in default, the student is able re-establish Title IV eligibility. Participation in this program requires the student to complete a Rehabilitation Application and make nine full monthly payments within 10 months. Each payment must be made within 20 days of the due date for FFEL and Direct Loans and 15 days for Perkins Loans. The student can't pre-pay in lump sums, and wage or tax refund garnishments do not count toward the nine payments. The student must return the completed Rehabilitation Application to the loan holder before making the ninth payment. Once the loan holder has received the nine on-time, full monthly payments and the completed application, the student's loan will be purchased by a lender, removing the loan from default.
Loan Consolidation combines all federal student loans into one loan with a single monthly payment, which is held by the U.S. Department of Education (external class). Consolidating defaulted student loans will remove the loans from default, restoring federal aid eligibility. To participate in loan consolidation, a student who has defaulted loans must currently be repaying the defaulted loans or agree to either an income-contingent or income-based repayment plan.
- The income-contingent repayment plan bases monthly payments on annual income, family size and total balance of outstanding loans. Payments may change as income changes. After 25 years of making payments under this plan, the remaining loan balance is forgiven, but may be taxable as income.
- The income-based repayment plan bases monthly payments on income, family size and total amount borrowed, but caps monthly payments at a percentage of discretionary income. These factors are re-assessed annually, so monthly payments are subject to change each year. After 25 years of repayment, the remaining loan balance is forgiven.
If the borrower doesn't agree to repay under either the income-contingent or income-based repayment plans, at least three consecutive payments must be made within 15 days of the due date before the consolidation can be processed and the loans removed from default. Wage and tax refund garnishment do not count toward the three payments.
Loan consolidation may not be the best option for everyone. Students enrolled in school at least half-time are not eligible to consolidate, but once a student is making payments on a consolidated loan, the student may once again enroll at half-time or full-time status. Loan consolidation may also increase the amount of interest paid over time, so students will want to consider this option carefully.
If the individuals you serve are interested in re-establishing Title IV eligibility after a student loan default, encourage them to contact their loan holder to discuss their options. Visit OCAP.org (external class) to learn more about default recovery options.
Calendar
- 2012-13 State System Academic Calendar
- Nelnet's Webinar Wednesday series (external link)
- OKMM Pre-Conference Financial Literacy Training, Oklahoma City - Oct. 10, 2012
- OCAP Annual Conference, Oklahoma City - Oct. 11, 2012
- OK-CAN/GEAR UP Post-Conference, Oklahoma City - Oct. 12, 2012
- Deadline for Gainful Employment program information for award year 2011-2012 (external class) - Oct. 15, 2012
- 2012 FSA Conference - November 27-30, 2012 (external class)