Continuation of two loan programs
Continue to support both the
FFELP and FDLP at their current levels. Without
the competition, it is questionable whether the improvements seen over the last
few years would be maintained and extended.
Loan Consolidation (NASFAA)
the Consolidation loan program with the following changes:
the "single holder rule" that currently restricts borrowers whose entire
loan portfolio is held by a single lender to consolidate with that lender only.
This law limits borrower choice, especially when considering that
different consolidation lenders offer varying borrower benefits and incentives.
It should also be noted that more than one third of all Federal Student
loans are held by one particular private loan holder which means the likelihood
of a borrower falling under the single holder rule is relatively high.
the current fixed interest rate structure to a variable rate that can be capped
at the future loan cap of 6.8%. The
current consolidation interest rate formula calculates the weighted average of
the variable rate underlying loans and rounds up to the nearest 1/8 of a point.
This means that, depending on the economy, borrowers consolidating the
same loans at different times can end up with dramatically different fixed
interest rates that are based strictly on the timing of the application.
Increase Loan Limits (NASFAA)
loan limits to those listed in the table below:
undergraduate grade levels (1-5)
unsubsidized amount for grades 1-5 is only awarded to students who are
considered independents or whose parents are denied parent loans for credit
Voluntary Flexible Agreements (NASFAA)
the current statutory language be maintained permitting the Secretary to
negotiate Voluntary Flexible Agreements with Guarantors.
professional judgment and emphasize the importance of exercising professional
judgment when students and families are in difficult situations.
Section 484 (R) of the Higher Education Act.
operating losses are often a function of allowing non-cash expenses, such as
depreciation and amortization, to reduce income. These expenses should be
treated as non-taxed income and added to the worksheet for non-taxed income.
Prepaid Tuition Plans (NASFAA)
purposes of determining a dependent student's eligibility for funds under this
title, all "529" plans, including prepaid tuition and savings plans,
as well as Educational Savings Accounts (ESAs), and other similar educational
financial savings plans will be counted as a parental asset. For purposes of
determining an independent student's eligibility, all "529" plans,
including prepaid tuition and savings plans, as well as Educational Savings
Accounts (ESAs), and other similar educational financial savings plans will be
counted as the student's asset.
Federal Methodology Tables (NASFAA)
and formulas that underpin Federal Methodology should be reviewed and revised in
order to benefit students and their families by arriving at reasonable and
equitable family contributions.
FWS & Community Service
those schools which can certify that at least seven percent of their student
body is involved in community service to be exempt from any FWS community
service spending requirements. The
percentage would be factored by the total student financial aid population as
determined by the FISAP.
and clarify the conditions under which the Secretary may grant a waiver of the
utilization of Federal Work-Study funds for community service and include the
possibility of a family literacy/ reading tutor requirement. Do not prescribe in
the law what the requirements beyond the seven percent (7%) will be as each
institution has varying degrees of access to community service opportunities for
the current structure and allocation formula of federal campus-based programs.
Pell as Entitlement (NASFAA)
a Pell Grant Program "true" entitlement and assure that such an
entitlement will extend for ten years into the future. The Pell Grant maximum
should double in next five years, with an inflation adjustment after that. The
maximum award under this entitlement proposal would be as follows:
AY 2004-2005 $5,800
AY 2005-2006 $6,000 entitlement
AY 2006-2007 $6,500 entitlement
AY 2007-2008 $7,000 entitlement
AY 2008-2009 $7.500 entitlement
AY 2009-2010 $8,000 entitlement
AY 2010-2011 inflation adjustment
AY 2011-2012 inflation adjustment
AY 2012-2013 inflation adjustment
AY 2013-2014 inflation adjustment
AY 2014-2015 inflation adjustment
Commitment to need-based aid
historic federal commitment to need-based financial aid.
New programs or changes to existing programs should be considered in this
order to maintain and expand the federal commitment to need-based financial aid,
MASFAA supports the proposal of NASFAA, to do away with the Hope and Lifetime
Learning Tax Credits and use this otherwise lost revenue to bolster and increase
Pell and SEOG grant funding for the neediest students.
should recognize that students whose eligibility to work has been established
through database matches with Social Security and its own database, should
satisfy the I-9 requirement in order to work on campus or through the Federal
Work-Study program. The examination
of paper documents should be reserved for students who do not file the FAFSA or
whose data does not match electronically.