Campus Partners Update Newsletter May 1, 2008!
Holiday Closing: Campus Partners will be closed on May 26 for Memorial Day
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Inside Campus Partners Account Manager |
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Perkins Loan Funds – Cash Flow Declining
From your calls, we know many customers are experiencing a drastic decline in the balance of their revolving Federal Perkins Loan funds. For the last several years, low interest rates, variable rate Stafford and PLUS loans, and marketing by lenders led to a huge volume of loan consolidations. Perkins borrowers included their Perkins loans in the consolidation, paying their loan in full. Schools were forced to increase lending to avoid excess cash at the end of the fiscal year, when funds that were not lent would have had to be returned to the Department of Education.
Due to higher interest rates, especially last year’s fixed Stafford and PLUS rate increases, loan consolidation has dropped dramatically. Perkins borrowers are no longer consolidating their Perkins loans while in an enrolled or grace status; therefore, no payments are being made to replenish the funds. With no new federal capital contribution and the increased demand for Perkins loans, many schools face a potential shortfall in their Perkins fund account.
Organizations such as NACUBO and COHEAO (Coalition of Higher Education Assistance Organizations) are working with the Department of Education to provide schools with guidance to address this situation. Some of our customers have told us that these organizations have sent out surveys to assist them in their discussions with ED.
In an email sent to its members on March 28, 2008, COHEAO Executive Director Harrison Wadsworth, writes:
“COHEAO suggests that, if you haven’t checked your Perkins fund cash position recently, that you do so, and that Perkins administrators be sure to coordinate especially carefully during this award season with the financial aid office to avoid problems as financial aid is packaged for the upcoming academic year. COHEAO will continue working with the Department and our member institutions on providing information on how to address fund shortfalls.”
Stay tuned to the Campus Partners Update for more information on the fund shortfall crisis.
Higher Education Act and Related News
On the legislation front, work continues on the Higher Education Act reauthorization legislation with House and Senate education committee staff trying to reconcile 1,500 pages of the HEA into a final bill. It appears that another extension of the HEA may be necessary by April 30 (when the current extension expires).
Senate HELP Committee Chairman Ted Kennedy (D-MA) introduced Student Loan Liquidity legislation aimed at the credit crunch’s impact on the availability of student loans (S. 2815). The higher education community applauded the legislation, particularly independent and proprietary schools. For more details on this bill, including his Floor speech, go to
http://kennedy.senate.gov/newsroom/press_release.cfm?id=0ac7f886-15ca-462d-a88e-785f9db8cecd
Draft FISAP and Instruction Booklet Available
The Fiscal Operations Report for 2007-08 and Application to Participate for 2009-10 (FISAP) is currently under review by the Office of Management and Budget (OMB). You may use the draft FISAP and instruction booklet to prepare for the actual submission of the FISAP that will be available by August 1. The date that the school must submit the actual FISAP is Wednesday, October 1, 2008.
The following changes were made this year:
- Minor changes to the FISAP and instructions to enhance clarity and provide consistency.
- Revisions to the instructions for Part III, Section A, Field 1.1 and Field 1.2 concerning short-term, no interest loans to the Perkins Loan Fund. The instructions indicate that if a school intends to reclaim any additional Institutional Capital Contribution (ICC) that the school deposits into the Perkins
- Loan Fund during the 2007-2008 Award Year, the additional ICC must be entered as a short-term, no interest loan in its accounting records. These instructions also remind schools that additional ICC is reported in Field 22 and that a repayment of a short-term, no interest loan made to the Fund is reported in Field 23.
- Revised the definition of an Independent Student in the FISAP Instruction Booklet to reflect changes made by the College Cost Reduction and Access Act (the CCRAA), Pub. L. 110-84.
- Added a total field in Part II, Section E, Field 23 to collect total expenditure information for Fields 23(a), 23(b), and 23(c).
You may view this Dear Colleague Letter, CB-08-05 at http://www.ifap.ed.gov/dpcletters/CB0805.html.
Additional Guidance from ED on Collection Cost Caps
As published in our January 2008 Campus Partners Update, Federal Perkins regulations have been amended and require a 30% cap on collection cost that you may charge your borrowers for first placement. This new regulation will apply to loans placed on or after July 1, 2008. The cap for second placement and litigation is 40%.
We received confirmation from ED that the 30% cap for first placement applies only to loans placed with an external agency. If the school uses its own staff for the first collection effort, the 30% cap does not apply. Section 674.45(e)(2) was not amended and indicates that the school shall determine the amount of collection cost based on either actual or average costs incurred in collecting on a defaulted loan. Section 674.47(b)(1) also requires that you assess these costs:
“Except as provided in paragraph (d) of this section, the institution shall assess against the borrower, in accordance with sections 674.45(e) and 674.46(b), the costs of actions taken on the loan obligation pursuant to sections 674.44, 674.45, 674.46, 674.48 and 674.49.” These sections refer to collection activity.
We have also confirmed with the Department of Education that if the school is unsuccessful in collecting on the loan and places the loan with an external agency, the 40% collection cap cannot be assessed on the school’s internal collection cost. From ED:
“A collection agency’s fee may only be assessed based on a percentage of principal + interest + late charges. Although internal collection costs are included with the referral, the internal collection costs may not be used in calculating the amount of a payment that the collection agency retains as its fee.”
Campus Partners is looking at solutions to assist our clients and their collection agencies in complying with these new regulations.
New Poverty Guidelines
The Department of Health and Human Services (HHS) has posted the new poverty levels for 2008. The poverty levels listed below must be used to establish the eligibility of a Perkins borrower for economic hardship deferment under regulation 674.34(e)(3), which measures the borrower’s income against the poverty line applicable to the borrower’s family size. These new amounts will be effective July 1, 2008; however, for purposes of determining eligibility for economic hardships, they may be used immediately.
You may view the Poverty Guidelines for this and previous years on the HHS Web site at http://aspe.hhs.gov/poverty/08poverty.shtml.
Updates to the 2008-2009 Federal Student Aid Handbook
Recently released volumes of the FSA Handbook are now available on the Department’s IFAP web site. You may view this information by going to www.ifap.ed.gov. Under the heading Publications, click on Federal Student Aid Handbook. The following sections are now available.
• Application and Verification Guide
• Volume 1 - Student Eligibility
• Volume 2 - School Eligibility and Operations
• Volume 5 - Overaward, Overpayments, & Withdrawal Calculations
• Volume 6 - Campus-Based Program
FERPA – Notice of Proposed Rulemaking
On March 24, 2008, ED published a notice of proposed rulemaking to amend the Family Educational Rights and Privacy Act. According to the Department, “These proposed regulations are needed to implement amendments to FERPA contained in the USA Patriot Act and the Campus Sex Crimes Prevention Act, to implement two U.S. Supreme Court decisions interpreting FERPA, and to make necessary changes identified as a result of the Department’s experience administering FERPA and current regulations.” ED must receive your comments on or before May 8, 2008. You may view this Federal Register notice at http://ifap.ed.gov/fregisters/FR03242008.html.
Get Ready for Year-End Processing
June 30, 2008 is two months away, but it is not too early to start planning for year-end processing. Use this checklist to help close the fiscal year successfully:
1. Reconcile loan and accounting information.
· Reconcile all disbursements for the year.
· Correct and return all unpostable new loans and advances.
· Check and update separation dates.
· Reconcile your general ledger.
2. Determine special needs and communicate them to us.
· Contact your auditors to determine the reports they need.
· Provide us with instructions for special mailing requirements for year-end reports.
· Submit change/adjustment requests for processing.
3. Work the Cohort Default Rate Report.
· Provide your Customer Service Representative with requests for coding changes.
As the end of the fiscal year approaches, our goal is to process all Customer Service requests in a timely manner. All requests are processed in the order that we receive them, whether they arrive via regular mail, overnight mail, fax, DataLink Dispatch, or e-mail.
Important Year-End Processing Deadlines
June 7 - Requests for duplicate reports
June 20 - Requests for Change/Adjustment memos
June 27 - Year-end post begins
Remember, you can use eXpress Reports to access your fiscal year-end reports immediately following year-end processing. This Internet tool provides you with the fastest method of receiving your year-end information. Our Customer Service team can assist you with creating any special report that you need using myReports, our ad hoc reporting tool.
Audit Underway
Our third-party audit for the fiscal year ending June 30, 2008 is currently underway. The audit is being conducted by Porter Keadle Moore, LLP, and we expect their audit report to be available to you in mid-August. All loan types will be included in the testing of loans selected by PKM. This means Federal Perkins loans, all loans governed by HHS, as well as our campus-based private loans.
An Audit Report Request Form for 2008 is available on our Web site. Please stay tuned to the Campus Partners Update for more information.
Attachment: Audit Report Request Form
Long-term Customer Anniversaries
We are celebrating partnerships with several long-term customers this quarter. Included in this group are Barry University, North Carolina A&T State University, North Greenville College, and Oglethorpe University, which have been customers for 40 years! Special recognition goes to Bard College, the Culinary Institute of America, Herzing College of Technology, Marlboro College, North Carolina Wesleyan College, School of the Art Institute of Chicago, Ulster County Community College, and Virginia Union University, all of which have been customers for 35 years. We also want to thank Longwood College, Mid-America Christian University, Midland Lutheran College, Midway College, Nazareth College, Pinnacle Career Institute, and the University of South Carolina for entrusting us with their loan portfolios for 30 years.
Names of all customers attaining other milestone anniversaries with us during this quarter are attached. Customers reaching anniversaries with us during the third quarter of 2008 will be listed in the August Update.
Attachment: Long-Term Customer Anniversaries
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Needless to say, I am thankful for their being of “BE OF SUPERIOR SERVICE”(BOSS) to their clientele.
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Classroom 101 Workshops Schedule
Classroom 101 is scheduled for two more sessions this year. These popular workshops fill up quickly, so register now to avoid disappointment.
Date: July 10-11 and November 13-14
Time: 1st day: 8:30 - 4:00 2nd day: 8:30 - 12:30
To register, fax a completed registration form to Debra Pitts at 336-607-2025.
Attachment: Registration Form for 2008
Study Hall is in Session!
Our Webinar schedule for 2008 is posted below.
Our Study Hall schedule appears below. Be sure to join us on May 8 or our next Web conference featuring All About Accounting.
To register for these events, please contact Debra Pitts at dpitts@campuspartners.com.
Study Hall Schedule
| Topic | Date |
|---|---|
| All About Accounting | Thursday, May 8 2:00 to 3:30 Eastern |
| FISCOP Reporting | Thursday, June 12 2:00 to 3:30 Eastern |
| Cohort-What is it and How Do I Manage it? | Thursday, August 14 2:00 to 3:30 Eastern |
| The Borrower Experience | Thursday, September 11 2:00 to 3:30 Eastern |
| Regulations Update | Thursday, October 9 2:00 to 3:30 Eastern |
| All About Collections | Thursday, December 11 2:00 to 3:30 Eastern |
Conference Schedule-See you there!
Representatives from Campus Partners will attend the following conferences.
KASRO will hold its Spring Conference on May 7-9, 2008 at the General Butler State Resort Park in Carrollton, KY. More details available soon on their website at www.kasro.net.
Cutoff dates for April, May, June, and July are presented below:
Transaction |
April 2008 |
May 2008 |
June 2008 |
July 2008 |
|---|---|---|---|---|
| Last day to receive collection payments | 4/25 |
5/27 |
6/24 |
7/28 |
| Last day to receive regular payments | 4/28 |
5/28 |
6/25 |
7/29 |
| Last day for online payments | 5/02 |
5/30 |
6/27 |
8/01 |
| Date final post begins | 5/02 |
5/30 |
6/27 |
8/01 |
| Report date used for final post | 4/30 |
5/31 |
6/30 |
7/31 |
| Last day deposits created for deposit to bank account | 4/30 |
5/30 |
6/27 |
7/31 |
2008 Cutoff Dates
| Month | Last day to receive collection payments | Last day to receive regular payments | Last day for on-line payments | Date final post begins | Report date used for final post | Last day deposits created for deposit to bank account |
| December 2007 | 12/21/2007 | 12/26/2007 | 12/28/2007 | 12/28/2007 | 12/31/2007 | 12/28/2007 |
January 2008 |
01/28/2008 | 01/29/2008 | 02/01/2008 | 02/01/2008 | 01/31/2008 | 01/31/2008 |
| February 2008 | 02/26/2008 | 02/27/2008 | 02/29/2008 | 02/29/2008 | 02/29/2008 | 02/29/2008 |
| March 2008 | 03/25/2008 | 03/26/2008 | 03/28/2008 | 03/28/2008 | 03/31/2008 | 03/28/2008 |
| April 2008 | 04/25/2008 | 04/28/2008 | 05/02/2008 | 05/02/2008 | 04/30/2008 | 04/30/2008 |
| May 2008 | 05/27/2008 | 05/28/2008 | 05/30/2008 | 05/30/2008 | 05/31/2008 | 05/30/2008 |
| June 2008 | 06/24/2008 | 06/25/2008 | 06/27/2008 | 06/27/2008 | 06/30/2008 | 06/27/2008 |
| July 2008 | 07/28/2008 | 07/29/2008 | 08/01/2008 | 08/01/2008 | 07/31/2008 | 07/31/2008 |
| August 2008 | 08/26/2008 | 08/27/2008 | 08/29/2008 | 08/29/2008 | 08/31/2008 | 08/29/2008 |
| September 2008 | 09/23/2008 | 09/24/2008 | 09/26/2008 | 09/26/2008 | 09/30/2008 | 09/26/2008 |
| October 2008 | 10/28/2008 | 10/29/2008 | 10/31/2008 | 10/31/2008 | 10/31/2008 | 10/31/2008 |
| November 2008 | 11/21/2008 | 11/24/2008 | 11/26/2008 | 11/28/2008 | 11/30/2008 | 11/26/2008 |
| December 2008 | 12/26/2008 | 12/29/2008 | 01/02/2009 | 01/02/2009 | 12/31/2008 | 12/31/2008 |
| January 2009 | 01/27/2009 | 01/28/2009 | 01/30/2009 | 01/30/2009 | 01/31/2009 | 01/30/2009 |
