Meeting Minutes

Report from Audit and Finance - Jane McNaughton, Chair
Jane reported that the SASFAA 990 tax return had been filed. An extension was filed to allow Anne Rochester, CPA, time to research why the bank reconciliation from QuickBooks 99 did not tie to the QuickBooks 99 trial balance report (listing of all accounts). QuickBooks 99 software did not have the reporting capability to reconcile these reports. QuickBooks 2003 has been purchased and will be installed by SASFAA Treasurer Sonja McMullen after the conference. Anne Rochester, Jane McNaughton and Sonja McMullen will run reports on the new software to compare them to the QuickBooks 99 reports or obtain additional reports. The purchase of the new software also comes with technical support.

Jane reported that she will contact Devonda Munson Collins with Bank One about performing the SASFAA audit for 2001-2002 after the conference and will report to the Board at the June 2003 Transitional Board Meeting.

Jane reported that she had contacted the members of the audit and finance committee (Terri Parchment from Tennessee, Buddy Jackson from Alabama and Chris Tolson from Kentucky) to help with balancing cash receipts each day of the conference after registration.

At the November 2002 Board meeting, the Board had asked Jane to survey SASFAA's membership about their willingness to use VISA and Mastercard for conference fees and membership dues payments in response to a proposal from Nova Merchant Services. Jane compiled the results of the survey and emailed them to the members of the SASFAA Board . Jane asked for discussion from the Board about the proposal.

Jane submitted copies of the current investments for the Board's review. Three certificates of deposit mature in 2003 (July 7, September 19 and December 29) and Jane will work with Jim Mills of SunTrust Bank Investment Services to reinvest these funds according to SASFAA's investment strategy.

Report from Conference Committee - Janet Sain, Chair
The Conference Committee worked very diligently to ensure that all aspects of the annual meeting were provided for all the attendees. Major areas of responsibilities were as follows:

Local Arrangements - Making sure that all arrangements that needed to be completed at the local level were accomplished. Transportation, Flowers, Off-site events, copier, decorators, commuter suite, signage, conference headquarters, volunteers, registration, community service projects, welcome address, local talent, VIP gifts, entertainment, etc.
AV - Seeking AV equipment from local colleges, set-up and teardowns, PC lab, special requests, technical assistance, troubleshooting, loading laptops, internet access.
Menus - Selecting meals for all functions in conjunction with the conference whether they are on-site or off. Including breaks, receptions, meetings, etc. Arrange for special dietary needs.
Evaluations - Concurrent session forms are stored on-site at ecpi. There are enough forms for the next several years. Overall conference evaluation forms are created by the Conference Chair in training. The summaries are tallied for both by the Chair in training.
Sessions - Requested sessions from the membership and this was a very successful endeavor. DOE sessions were coordinated by the DOE rep on the committee. Due to travel budgets we decided to try all DOE sessions on one day. This enabled several DC DOE reps to participate. Each committee member was assigned sessions to follow-up on and prepare information sheets. Followed the "track" theme again this year. Used Management, New Aid Officers, Technology, DOE and Diversity.
General Sessions - Coordinated Opening, Lunch, Banquet and Closing session speakers. Some were sponsored by vendors in addition to the vendor exhibiting costs they had already paid.
Exhibit Area - Received bids from Drayage companies. Coordinated all efforts with them for delivery of booth items and registration packet materials. Worked with drayage to develop exhibit hall layout, last minute changes, electrical requirements, shipping, etc.
Printing - Included the conference program, pocket directories, pre-conference postcards, invitations, signage. Worked in conjunction with vendors for their section.
Website - Worked in conjunction with Electronic Services chair to create Conference web pages and all appropriate links. Keep information up-to-date and assisted as conference photographer.

Initially, 650+ pre-registered for the conference. Final tally was 753 registered and 31 speakers attended the conference. Printed materials for 800 was ordered. Conference totes were ordered at 750 for attendees (red bag) and 1000 (canvas bags) to include enough for the summer workshop attendees at the summer workshop.

Suggest we include Diversity chair as ex-officio for future if we decide to include them in sessions and activities.

Report from Diversity Committee - Deborah Clark, Chair
The schedule of activities coordinated by the SASFAA Diversity Committee is as follows:

Sunday, February 23
Diversity Exhibit - A display design to share materials, ideas and suggestions that can be implemented in our various places of employment.

Diversity Expo - Representatives from organizations who offer services to assist those with disabilities will bring materials and maintain a table from 1:00 - 5:00. We have confirmed: Florida School for the Death, Spencer for Independent Living, Florida Division of Blind Services, Florida Business Leadership Network, and Southeastern Dog Guides.

Monday, February 24
Diversity Tract - Two of the Diversity Sessions will be presented.

Mardi Gras Night - An International Event inviting the membership to enjoy deserts, drinks, dancing. There will also be a costume contest with a cash prize.

Tuesday, February 25
Diversity Tract - Two of the Diversity Sessions will be presented

General Session Speaker - Mr. Hallerin Hilton Hill: Make 'em Say WOW! CEO and founder of Wisdom House (a multimedia company), Mr. Hill is a radio talk show host, TV commentator, motivational speaker and trainer. He is the author of the book the Seven Pillars of Wisdom and a Grammy-nominated songwriter. Whitney Houston recorded His song, Who Would Imagine A King, for the movie The Preacher's Wife.

Multi-Cultural Leadership Luncheon - The entire membership was invited to attend this event, with seating limited to 100. Approximately 65 reservations have been received. Two of SASFAA's icons, Joel Harrell and Cruzie Lucero, will be sharing their personal experiences.

Sponsorship
The Committee was successful in securing sponsorship in the amount of $6,500.00 to cover the cost of the General Session Speaker and the Multi-Cultural Leadership Luncheon.

Acknowledgement
Sincere appreciation is extended to Liza Bruce, Kathleen Caldwell, Tim Freeman, and Mike O'Grady for the invaluable services rendered as members of the 2002-2003 SASFAA Diversity Committee.

Report from Legislative Relations - Karen Fooks, Chair

Appropriations
FY 03 Omnibus Appropriations Act
A mere four months (!) after the start of the fiscal year, we may finally have a FY 03 budget for education. Last week, both the House and Senate passed a consolidated appropriations bill that funds most areas of the federal government. As of this writing, the President had not yet signed the bill but was expected to do so shortly. The Labor, HHS and Education portion of the bill appropriates $130.9 billion, approximately $.3.3 billion more than last year. It also provides $53.4 billion for Department of Ed discretionary programs, about 7% more than last year but less than half the average annual increase from 1997-2002. The final bill provides for a $4,050 Pell maximum award, increases SEOG by $40 million to $765 million and increases TRIO and GEAR-UP. The Pell appropriation includes $576 million more than the President requested to help address the estimated $2 billion Pell Grant shortfall from prior years' appropriations. despite the increases, some programs will still actually see a decrease in appropriations because of a provision to make .65% across the board cuts in order to stay within a level the President could support. This means that FWS appropriations will actually fall from $1.011 billion to $1.004 billion. Budget details are attached.

FY 04 Budget
On February 3, the President released his FY 2004 budget. It includes a $1.9 billion increase for Pell Grants which would eliminate the Pell Grant shortfall but would only fund a $4,000 maximum Pell Grant award. The spending plan would also level-fund SEOG and FWS and would not provide any new federal funds for the Perkins Loan program and eliminate LEAP.

Reauthorization
A number of higher education associations, including SASFAA, have released their reauthorization proposals. Most proposals to date are fairly general in nature and have left "place markers" for more contentious issues such as inducements and loan consolidation. By far the most comprehensive and detailed recommendations have been from NASFAA. The SASFAA recommendations closely follow the NASFAA proposals except for a few areas of difference or certain recommendations that were technical in nature or specific to NASFAA. SASFAA sent its recommendations to the House Education Committee on December 31.

The U.S. Department of Education is also asking for comments on reauthorization by February 28. ED has taken a different approach, however. They are requesting comments designed to address specific questions including:

How can ED improve access for all students, especially those with disabilities?
How can the federal government encourage greater persistence and completion among higher education students?
How can existing HEA programs be changed and made to work more efficiently and effectively in today's environment?
How can the federal government eliminate any unnecessary burdens on students, institutions or the government and still maintain taxpayer accountability?
How can ED best prioritize the use of federal funds?
How can the federal funding already provided best help improve educational quality, expand access and ensure affordability?
Are there innovative ways ED can use tax credits and deducations to improve access and choice?
How can program effectiveness be measured?

University of Michigan Supreme Court Case
On January 16, the U.S. Justice Department filed a friend of the court brief for the plaintiffs against the University of Michigan admissions policies, arguing that they were thinly veiled quota systems and that diversity was no a compelling enough government interest to allow the UM affirmative action admissions policies to stand.

The move was roundly criticized by the higher education community. Most of the Washington higher education associations as well as a number of individual colleges and universities and a number of Democratic members of Congress filed/will file briefs in support of UM position.

The Supreme Count is scheduled to hear oral arguments on April 1.

Legislation
H.R. 12 - "Fed Up" Higher Education Technical Amendments

Description: Makes clarifying and technical changes. Reinstates waiver of 30-day delay/multiple disbursement in a single term loan provisions.

Status: Introduced January 7 by Rep McKeon (R-CA). Failed to pass the House on July 16. Currently on motion to suspend the rules and pass the bill as amended.

S. 174 - Tuition Assistance for Families

Description: Expands Lifetime Learning Tax Credits from $10,000 to $12,000, increase income limits for Hope and Lifetime Learning from $40,000-$55,000. Incrreases Pell Grant awards from $4,000-$4,500.

Status: Introduced January 15 by Sen. Biden (D-DE). Referred to finance committee.

H.R. 129 - Higher Education Affordability and Fairness Act

Description: Amends the tax code to provide a deduction for higher education expenses. Creates an annual study by the Comptroller General to examine whether higher education tax incentives affect tuition rates.

Status: Introduced January 7 by Rep Holt (D-NJ). Referred to finance committee.

S8 - Educational Excellence for All Learners Act

Description: Raises the maximum Pell Grant to $4,500, makes Hope and Lifetime Learning tax credits refundable. Phases out the loan origination fees.

Status: Introduced January 7 by Sen Daschle (D-SD). Referred to education committee.

S. 55 Veteran's Higher Education Opportunities Act

Description: Provides veteran's assistance for the average monthly costs of tuition and expenses for commuter students at public institutions that award baccalaureate degrees.

Status: Introduced January 7 by Sen. Johnson (D-SD)

H.R. 227 - Student Loan Disbursement

Description: Reinstates waiver of 30-day delay/multiple disbursements in a single term.

Status: Introduced January 7 by Rep. Wu (D-OR)

Sources for articles: AASCU, NASFAA, Student Aid Alliance, Student Aid News

Report from Membership Committee - Maureen McFarlane, Chair
No report was submitted.

Report from Newsletter Editor - Sandy Neel, Chair
The winter newsletter was placed on the web before the Christmas Holiday break and before the deadline for the election information. Getting the newsletter to the web was a much easier process this time for Erik and Sandy. The printable version of the newsletter looked very similar to the old paper versions of newsletters. Sandy hopes this is more of what the people who liked the old paper newsletter are looking for. It is slow to print but it is more reader friendly. There were eleven advertisements for this newsletter and Sandy is expecting a few more for the remaining two issues.

The next copy deadline for the newsletter is March 15th. This is a revised date. The Newsletter will be published in late March or early April. The last copy deadline date is May 12, 2003 with the newsletter being published in June. Please have any articles to Sandy by those dates. Sandy will not be sending out reminders. If you would like to send pictures to Sandy electronically so that they can be published in the newsletter, please do so and she will try to make it happen along with Erik's help of course!

Report from Site Selection Committee, Ron Gambill, Chair
Ron presented the proposals for the 2006 SASFAA Conference. The potential sites were the Grove Park Inn Resort in Asheville, NC and the Sheraton Four Seasons Hotel in Greensboro, NC. The advantages and disadvantages of both hotels were discussed.

ACTION: Rosemary Stelma moved that the 2006 SASFAA conference be held at the Sheraton Four Seasons Hotel in Greensboro, NC. The motion, seconded by Barry Simmons, was approved.

It was suggested that SASFAA develop its own "contract" to be presented to hotels that are being considered potential sites for the SASFAA conference. Once this contract has been developed, it could be shared with the SASFAA state presidents to be used as a "specimen" contract for them to follow in their respective states. President Koonce asked Ron Gambill to work on developing this "contract" and report back to the board at its next meeting.

Report from Vendor/Sponsor Committee - Alan Whittington, Chair
We have 52 sponsors for the annual conference as classified below:

10 Platinum
11 Gold
15 Silver
16 Bronze

One Gold sponsor, College Foundation Inc., will not have a booth in the exhibit area.

One new Bronze sponsor, TERI, is coming at the last minute. The drayage company is working with us to provide booth space for them. This would give us 17 Bronze sponsors, for a total if 53 sponsors for the conference.

The drayage company contracted for the conference, Echo Expo, has been easy to work with. They estimate their charges will be around $4,000. Echo Expo has expressed a desire to bid on drayage services for the 2004 conference in Birmingham.

Special thanks to Suntrust Education Loans for sponsorship of the Board and Conference Committee dinner last night.

We will continue to work with Sandra Neel to get new sponsorships for the upcoming newsletters.

We will continue to work with Ellen Green to get sponsorship of several items for the new aid officers workship (NAOW). The first thing needed is sponsorship of dinners for the NAOW instructors meeting to be held in March.

Report from Electronic Services Committee - Erik Melis, Chair
The 2002-2003 Electronic Services Committee chair, Erik Melis, was not able to attend the November 2002 board meeting and will not be able to attend the February 2003 board meeting.

The following additional updates were made to the SASFAA web site since the November Board Meeting:

The following web-related projects are in progress or will soon be:

The following items related to SASFAA Listserv maintenance have been completed:

The following items related to SASFAA Listserv maintenance are in-progress or will soon be:

Throughout the course of the upcoming year, the Electronic Services Committee will continue to work with the elected Board, State Presidents, and Committee Chairs to get input on improvements and updates for the SASFAA web site and to determine ways that the Electronic Services Committee can assist in meting goals and objectives.

Liaison Updates

Report from Lender Liaison, Karen Gibson

Congressional Record, January 9, 2003 - The government, under the President and under Republican leadership, has increased spending for education by 132 percent. The President has more than tripled the loan forgiveness activities in areas such as math and science, special education teachers, and low-income schools. And under the President's proposal, teachers would qualify for up to $17,500 in loan forgiveness, up from the current $5,000 that teachers get if they go into high-need schools.

Tax Cut Has Worked, Translated Into Real Dollars - A new above-the-line reduction for qualified higher education expenses. It is a $3,000 deduction today. It is going to go up to $4,000 in 2004. And it represents an $11 billion tax cut for Americans who are sending their kids to school. Eliminated is the 60-month limitation on the student loan interest deduction. That represents a $3.4 billion benefit to kids who get out of school with lots of loans. We know that is one of the big issues for kids today. They leave the school system and their college experience with a lot of loans, and they have to pay them back. This is a $3.4 billion attempt to try to reduce that burden. He has increased the annual limit on the contribution to the educational savings accounts from $500 to $2,000. That is a $1.2 billion benefit to people who are trying to save to make sure that they can go to college and participate in the American dream.

Consolidation Loans, Banks, Professors, Graduate Students, College Costs Discussed - The Chronicle of Higher Education continued to hold its online discussion on the "renewed debate in Congress" over the student loan consolidation program this week. The discussion has traveled widely from its initial focus on consolidation loans to cover a wide variety of opinions on higher education in general.

Guarantor Submits Reauthorization Proposals to House Committee - In response to the request for reauthorization proposals from the House Committee on Education and the Workforce, USA Funds submitted a series of proposal meant to "supplement and, in some cases, re-emphasize" the proposals submitted by the student lending community trade associations. The agency explicitly noted its support for the elimination of in-school consolidation, creating consistency of interest rate structures for Stafford and consolidation loans, requiring borrower counseling for consolidation loans, broadening eligibility for extended borrower repayment, and correcting the PLUS SAP Gap problem. The document also expressed concern about the volume of defaulted loans directed at the Direct Loan consolidation program and heavy reliance on this process as a collection mechanism, with an indication that additional work was being done to develop appropriate alternatives.

Rising Tuition + Slumping Stock Market Build Private Loan Volume - According to the College Board, alternative loan borrowing grew 39% in just one year to about $5 billion for the 2001-2002 academic year and many schools expect to see similar growth figures this year. The cost and availability of these alternative loan programs vary widely depending upon a family's credit history, a student's field of study, historical default rates at the school, and potentially even the lender's relationship with the school.

EdFund to Offer New Round of Borrower Education Grants - Edfund announced this week it will begin accepting applications this month for the second round of funding under its three-year $12 million, borrower education grant program, EDSHARE.

Education Lending Ground Announces $1.45 Billion in Volume - Education Lending Group, Inc announced this week it originated in excess of $1.45 billion dollars of guaranteed student loan volume for the year ended Dec. 31, 2002. All of the Company's marketing channels, Student Loan Xpress, Inc., the Grad Partners Program, Consolidation Assistance Program, and Education Funding Resources, LLC, contributed to the final volume figure.

Directory of Lenders Found at LoanDirectory.com - Launched January 1, LoanDirectory.com, a free online directory of lenders, allows consumers to contact Lenders directly as they shop around for the most competitive loans. LoanDirectory.com currently lists over 200 lenders offering all types of financing, including home loans, commercial loans, auto loans, business loans, personal loans, credit cards, student loans, and venture capital. Consumers can search for loan programs that meet their specific financing needs.

ED Submits for OMB Review Electronic Debit Payment Option for Student Loans - The Department of Education invites comments on the Electronic Debit Payment Option for Student Loans. An Electronic Debit Account Program will give the borrower another option in which to repay federally funded student loans via automatic debit deduction from their checking accounts.

Plus MPN is Now Available for the 2003-2004 Academic Year - After a one-year transition period, it will replace the current approved promissory note for Federal PLUS loans made under the FFEL Program beginning with the 2004-2005 academic year. The PLUS MPN is designed for a parent borrower to use as a multi-year note for one dependent student. Under the PLUS MPN process, a parent borrower will sign a PLUS MPN only once, at the time the parent first borrows for that dependent student. The parent may obtain additional loans for that same dependent student based on the originally signed MPN during the same year or in subsequent years, for up to ten years after the date the parent first signed the PLUS MPN. Generally, as long as the parent borrower, the dependent student, and the lender do not change, a new PLUS MPN is not required. However, as with the Stafford Loan MPN for student borrowers, the parent borrower, the school or the lender may request that a new PLUS MPN be signed for each new loan period even if doing so would not otherwise be required.

ED Issues Guidance on Consolidation LVCS - The Department of Education issued a Dear Colleague Letter reminding FFEL loan holders of their obligation to respond to loan consolidation verification requests in a timely manner. All loan holders, within 10 business days after receiving a written request for a certification from a lender, must provide the requesting lender with the requested certification information or a reason why it is unable to provide the information. Failure to comply could result in fines or other sanctions.

Student Loans Vital for College Access - the College Board published a research report written by Sandy Baum, Ph.D., Professor of Economics, Skidmore College on the "The Role of Student Loans in College Access". She concludes that there is "no evidence to date that typical student debt levels are unmanageable". Although increase borrowing is a valid concern. Baum refers to a 1998 study of student borrowers in repayment with an average total debt of a bout 19,000 and monthly payments averaging close to $200. The study found that half of the respondents felt burdened by their loan debt, but two-thirds said the loans were very important in allowing them to continue their education after high school and that the payments were worth the benefits. The study revealed that fewer than 20% said they had altered their career plans because of student debt. Moreover, there was no evidence that debt levels measurably affected other major lifestyle options, such as home ownership and marriage. The report notes that for many, higher education simply is not affordable without some student loan debt and the personal benefits from a higher education outweigh the burden of the debt.

NASFAA Calls Loan Consolidation a 'Foremost Concern' - Loan consolidation and increasing loan limits are issues that are foremost among the concerns for financial aid administrators. Nassau's recommendations state that "nowhere in setting up the loan consolidation program years ago did Congress contemplate using the system as a means of refinance." With respect to the single holder rule on consolidation loans, NASFAA is recommending that the rule be maintained, but clarified to state that Perkins Loans can be consolidated, but are not considered to be held by another holder in order to get around the single-holder rule. NASFAA continues to recommend in this area to promote consumer protections and awareness, industry stability, and reduce unnecessary increases in loan debt.

Department Studies Direct Loan Asset Sale - The authority given the Secretary to sell Direct Loans was first examined by the Clinton Administration under the direction of Secretary Riley and specifically Greg Woods of the Office of Federal Student Aid, paid two separate outside contractors to conduct two extensive studies on the feasibility of liquidating the entire Direct Loan portfolio. The article also noted that the Department is currently considering two options: selling the Direct Loans outright or securitizing them. The Department appeared to be leaning more seriously toward the second option, loan-industry officials said. Many of the largest lenders in the guaranteed-loan program sell the loans they hold to investors as a way to raise capital quickly so they can finance new loans. Federal student loans are attractive to investors because they come with a guarantee from the government that it will cover most losses that occur when a borrower defaults.

EDAmerica to Service Texas Loans for NTHEA - Edamerica announced this week it has formed a strategic alliance with North Texas Higher Education Authority, Inc. (NTHEA) to service student loans for schools and borrowers in Texas. Edamerica will add over $650 million in NTHEA student loan volume to its servicing system over the next to years.

Sallie Mae Partners with Association of American Medical Colleges on Consolidation Loans - Sallie Mae and the Association of American Medical Colleges announced this week the introduction of the MEDLOANS Consolidation Loan, a federal consolidation loan program created especially to help medical school borrowers manage their education loan debt. This new product allows eligible borrowers to lower their monthly student loan payments by up to 50 percent or more, lock in historically low interest rates, and potentially save thousands of dollars in interest expenses by taking advantage of special borrower benefits.

Defaults High on Consolidation Loans - Defaults in the student loan consolidation program are considerably higher than those in the traditional Stafford and PLUS loan programs and the Direct Loan program consolidation loan program is experiencing default rates significantly higher than the defaults in the FFEL Program, budget data released this week by President Bush shows. These differential rates of default do not have a direct impact on program costs, however, because ED assumes recovery rates of about 113 percent. In terms of actual collections, FFEL has consistently performed above ED budget projections while DL has collected less than anticipated.

Four Borrowers Arrested for Overdue Student Loans - U. S. Marshals arrested four people in Minnesota for failure to appear for court-ordered debtor examinations related to overdue payments on student loans. The arrests were the result of "Operation Anaconda Squeeze" where the federal government seeks financial information from delinquent borrowers that it needs to collect federal debt such as student loans. The U. S. Attorney began with a list of 150 borrowers who had not responded to several requests for information. Those who did not respond were then issued a court order to go through a debtor's examination to provide the information. If they failed to show, a warrant for arrest was issued. Fifty seven debtors provided the information to void the warrants, 30 were either dead or no longer in Minnesota, 6 cooperated when Federal Marshals appeared at their door, and 4 were arrested and taken into custody. The arrested four turned over the information and were released. U.S. Attorney Thomas Heffelfinger said he hopes that "Anaconda Squeeze" will show delinquent debtors that the federal government is serious about collecting the money it's owed.

Report from the Department of Education Liaison, Greg Martin

Training Issues
Region IV has a new Training Officer, Yolanda Blackman. Although many of you have already met Yolanda, it is my pleasure to formally introduce her at this Executive Board meeting. Yolanda will gradually assume responsibility for state conferences throughout SASFAA (not including Virginia in Region III) beginning this spring.

Yolanda will attend the Kentucky and Tennessee conferences with me, and the remaining spring conferences with David Bartnicki. She is already conducting Department sponsored training workshops in the SASFAA region. Yolanda is enthusiastic about being about being a Training Officer in Region IV. Please join me in wishing her what I know will be a successful tenure in this position.

Title IV Issues
In view of the number of Federal presentations scheduled to take place during the SASFAA Conference, including a Federal Update from Jeff Baker, the scope of this report is limited to a few changes and publications about which you should be aware. Foremost among them is DCL GEN-03-03 (February 2003), announcing a PLUS Master Promissory note. After a one-year transition period, it will replace the current approved promissory note for Federal PLUS loans made under the FFEL program beginning with the 2004-05 academic year. Copies of the PLUS MPN and related forms are included in the enclosure to the DCL. The PLUS MPN may first be used for loan periods beginning on or after July 1, 2003 and must be used for loan periods beginning on or after July 1, 2004 or for any loan certified on or after July 1, 2004, regardless of the loan period.

The PLUS MPN is designed as a multi-year note for one dependent student borrower. Generally, as long as the borrower, the dependent student and the lender are the same, a new PLUS MPN is not required. Each loan received under a PLUS MPN is a separate and distinct loan. The terms applicable to each loan are dependent on the terms in effect at the time each loan is made.

Each school and lender must establish and document the process under which one of the parties will collect the requested loan amount from the parent borrower. The school certification form is designed to be utilized for this purpose. However, schools may use any number of other methods including a separate PLUS loan amount request form, a parent response section on the institution's award letter, or documented telephone or electronic requests. Loan adjustments are permitted. Such adjustments may be requested by the parent borrower in writing, by telephone, or electronically. A record of adjustment requests must be made.

02-12-2003
Electronic Announcement addresses notification of stop payment due to unprocessed deobligations. Effective February 17, 2003, the Department has begun placing a stop payment on funding in the Pell Grant and Campus Based programs. This stop payment action will effect approximately 200 schools and school system offices that have not taken actions necessary to resolve negative balances.

A negative balance occurs in Pell when the net amount of funds drawn by a school through GAPS for a particular year exceeds the net amount of student level transactions accepted by our systems. This frequently happens when a school reports a downward adjustment to a student's previously reported Pell disbursement without either (1) reporting that it spent the released funds on other students, or (2) returning the unspent funds to the Department.

02-18-2003
Electronic Announcement addresses distribution of the FY 01 draft cohort default rates. On February 18, 2003, the Department distributed the fiscal year 2001 cohort default rate notification packages. For schools enrolled in the Electronic Cohort Default Rate (eCDR) process, delivery was made to the SAIG destination point designated by the school. Each eCDR package contained (1) a cover letter (message class SHDRLROP), (2) a reader friendly loan detail record report (message class SCHDRRPOP), and an exact-type loan record detail report (Message class SHCDREOP).

Time periods for challenging the FY 01 draft cohort default rates begin on Wednesday February 26, 2003. For domestic schools that had not enrolled in the eCDR process and for all foreign schools, the Department mailed a hard copy notification package on February 18, 2003. Schools that have not already done so are strongly encouraged to complete an eCDR enrollment form available at www.sfawebenroll.ed.gov.

02-19-2003
Electronic Announcement is a compilation of frequently asked questions regarding the eZ-Audit process. Ez-Audit will provide schools with a single point of submission for financial statements and compliance audits through the web. Ez-Adit will be available in April of this year. OMB still requires submission of A-133 reports to the Federal Audit Clearinghouse. Essentially, this means that public and private nonprofit institutions cannot use eZ-Audit at this time.

Sources of Assistance for Schools, updated through February 2003, is now available through fsadownload.ed.gov. Contact and/or customer service phone numbers for all Department process are listed in this publication.

INS Issue
The SFA Handbook Volume 1, Student Eligibility, states that a student with a non-immigrant visa isn't eligible for SFA funds unless he or she has an I-94 with the appropriate endorsement (Processed for I-551; Temporary Form I-551; Refugees; Asylees; Conditional entrants, Parolees; Cuban-Haitian entrants). The Handbook lists some, but not all, of the possible non-immigrant visas a student might possess. A complete list of non-immigrant visas is available on the INS website at www.ins.gov/services/visas.htm. The INS chart available at this site clearly identifies and explains all of the non-immigrant classifications.

Report from Agency Liaison, Ken Player
State budget shortfalls continue to be a major concern in almost every state, especially with those agencies that handle state grant programs. One result of these budget woes is that tuition is being increased sharply to make up for shortfalls in state education funding. The other result of the budget cuts is reduced funding for state grants, further complicating the issue.

Guaranty agencies continue to be concerned about the new wave of consolidation loan marketing efforts and the methods being employed. There are several entities conducting aggressive telemarketing and mail campaigns to encourage borrowers to change lenders when they consolidate. Loan consolidation is high on many higher education groups' lists to be reviewed during the upcoming reauthorization process.

Guaranty agencies continue to be aggressive in developing debt management programs for lenders and borrowers. Credit card debt continues to mount for students and some borrowers are experiencing problems when entering repayment. The goal of debt management programs is to educate borrowers prior to their incurring excessive debt and teach them how to manage their finances during and after school.

Guaranty agencies and lenders are busy programming for the PLUS Master Promissory Note, which was recently finalized. The PLUS MPN allows parents to borrow in subsequent years without having to sign a new note.

State Updates

Alabama Report
Members and staff of the Alabama Commission on Higher Education presented to Legislative Review Committee in February the following reasons for increasing funding for the state's only need-based aid program, the Alabama Student Assistance Program:

Family and per capita incomes in Alabama are significantly below national averages.
Tuition, spurred by proration cuts last year, rose on average 6-15% this year alone. National sources report that even after adjusting for inflation, tuition and fees have more than doubled in 20 years.
The vast majority of students today are older, attend part-time, or have work or family responsibilities while in college. Very few aid programs address the needs of this large (and growing) population.
Need-based aid provided through the state's need-based aid program helps only 2% of Alabama's undergraduates. The national average is nearly 6%.
The gap between college costs and family resources continues to widen.
Far too many students and families are paying for college with two and three federal and private loans - and mortgaging their futures to do so. As a result, these graduates must postpone the purchase of homes, cars, and other goods and services after graduation. Thus, their financial contributions to our economy are deferred.
Too many students are forced to revamp career goals because of quickly mounting debts.

By increasing funding for Alabama's need-based aid program, the state will be investing in Alabama's future by helping students pursue a college education without mortgaging their futures.

Submitted by: William H. Wall, Ph.D.

ECMC Update

ECMC Winter Workshops
ECMC recently completed three regional training sessions for schools and lenders in Virginia. The workshops covered several topics including:

Serialization of the Stafford MPN for 2-year and private career schools,
Implementing the new PLUS MPN,
Understanding the Consolidation loan program,
Results of the 2002 negotiated rulemaking sessions,
Reauthorization of the Higher Education Act,
ECMC's default prevention strategies, and
Common Origination and Disbursement.

All participants were provided with a CD-ROM containing a complete set of training materials, allowing them to provide the information to those in the office who were not able to attend.

PLUS MPN Implementation
ECMC has completed much of the programming necessary to accommodate the PLUS Master Promissory Note. Some relatively minor programming remains to be done since both the current PLUS note and the PLUS MPN can be used during the 2003-2004 academic year.

ECMC is also planning to incorporate the PLUS MPN into the e-signature process. Since the student does not have to sign the PLUS MPN, we expect a much larger percentage of parents will sign their PLUS notes electronically this year.

Submitted by: Mike Hawkes

Georgia Student Finance Commission
Following is a list of accomplishments and new initiatives completed by the Georgia Student Finance Commission (GSFC) since the last board report. The Commission is a three-division agency that administers Georgia's HOPE Scholarship Program, other scholarships and grants; student loans; and lender guarantees for FFELP borrowers.

New GSFC Executive Director:
The Georgia Student Finance Commission board named Shelley C. Nickel as executive director on Feb. 4. She replaces Glenn Newsome who retired on Dec. 31. Ms. Nickel previously served as Special Assistant and Senior Policy Advisor to the Chancellor of the Georgia Board of Regents. Prior to that, she served as Budget Director for the Board of Regents, administering the USG's budget of $1.7 billion. She earned a bachelor of science degree in Community Development in 1978 and a master's of Public Administration in 1982, both from Penn State University.

Scholarships and Grants:
Due to the state's slow economy and declining state revenues, it was necessary to reduce award amounts students received for the second half of the academic year in all of the state-funded scholarship and grant programs. Additional reductions for the 2003-2004 school year currently are being considered by the Georgia General Assembly. However, the Georgia State Lottery continues to provide sufficient funds to fully fund Georgia's HOPE Scholarship Program and other lottery-funded programs.

Georgia Student Finance Authority (GSFA)
The Georgia Student Finance Authority continues to strive to help students in achieving higher education through the many means available to the agency.

Service-cancelable loan programs administered by GSFA for fiscal year 2003 have so far awarded 6,246 (new and returning) students with more than $15,529,735 dollars in 15 different programs of study. These students are able to repay the money borrowed through these programs by working in their specific field of study in the state of Georgia for a specified period of time.

The traditional loan program for the Authority has shown substantial increase for the fiscal year '03. This business has shown an increase in loans guaranteed of 21% ($45,708,276) for all schools through the end of January.

The Georgia First program, GSFA's educational alternative loan, continues to perform well. Thus far for fiscal year '03, more than $300,000 has been disbursed utilizing this educational cost tool.

All of these programs continue to be a focus for the GSFA Business Development team. In addition to visiting schools to talk about these products, the team is participating in a number of financial aid awareness fairs at schools throughout Georgia during the month of February.

Georgia Higher Education Assistance Corporation (GHEAC)

Submitted by: Shelley C. Nickel

Florida Department of Education, Office of Student Financial Assistance (OSFA)

Meteor Project and Software Implementation
The Meteor Project is a collaborative effort within the student aid industry to simplify and consolidate access to student financial aid information. Sponsored by over forty industry participants, and coordinated by the National Council of Higher Education Loan Programs, Meteor software provides open, non-proprietary, real-time access to all available aid information for a student, and consolidates it for display to students and financial aid professionals. OSFA is a Meteor sponsor and an active participant on the Meteor Advisory Team and its various sub-teams. We are proud of our contribution to the development and implementation of this revolutionary web services tool for schools and borrowers. OSFA plans to implement the Meteor software for use as an access and data provider in early March 2003.

Default Prevention
OSFA welcomes Default Prevention Specialist Patty Ceci, to the Customer Service Team. One of Patty's primary roles will be to work closely with schools, lender partners and OSFA's outreach representatives to establish and customize effective default prevention plans for each school. She is currently working with several schools in a default prevention pilot program.

Mapping Your Future
OSFA continues to support the collaborative efforts of Mapping Your Future (MYF). An excellent resource for our school partners, MYF is a free public service web site sponsored by OSFA and other guaranty agencies. The site offers participating schools:

Online Entrance and Exit Student Loan Counseling
ExitExpress - exit interview reports sent directly to OSFA
Customized School Page with full technical support

The MYF site is an excellent source of information for students and families about college, career, and financial aid choices. OSFA continues to provide MYF materials for financial aid offices of postsecondary institutions and high school guidance counselors.

OSFA, State Programs Activities
2002-2003 Appropriations
State-funded financial aid programs have an appropriation of $400 million to expend on 22 programs for the 2002-2003 academic year. The Bright Futures Scholarship Program expects to fund over 106,000 students; the Florida Student Assistance Grant (FSAG) expects to serve over 75,000 students.

Web Applications at www.FloridaStudentFinancialAid.org
Our customer friendly web homepage invites students to apply online with one application for all state programs. Last year, the online application was used by over 86,000 applicants. We expect over 100,000 applicants to utilize this service this year. Postsecondary institutions participating in financial aid programs have found the web capabilities for processing state financial aid to be comprehensive and a time saver for their staff.

2003-2004 Budget
Currently, state appropriation and education committees are working with our office in preparation for the 2003 Florida Legislative Session. Budget is the top priority.

KHEAA/KHESLC Update

Submitted by: Dr. Joe L. McCormick

North Carolina State Education Assistance Authority

Counselor Internships
NCSEAA is once again sponsoring the summer internship for school counselors in financial aid offices across the state. The internship has proven to be a great way for school counselors to learn the aid process; in addition, the aid offices benefit from the extra help with processing during the summer. Approximately ten campuses will serve as host institutions during the summer of 2003.

Scholarship Reference Guide Now Available
NCSEAA's comprehensive guide to financial aid resources, "Financial Aid for North Carolinians" was updated and distributed in November. Copies of the guide were distributed statewide to local high school libraries and school counselors, county libraries, financial aid directors and various state officials and agencies. The guide is also available online at www.CFNC.org , under the Paying for College tab.

College Foundation of North Carolina Statistics
Use of the College Foundation of North Carolina information service continues to soar among students. During the 2002 calendar year, approximately 152,000 accounts were established and nearly 48,000 admissions applications were filed via the CFNC website. The total number of CFNC accounts now exceeds 250,000.

CFNC is an information service helping students and their families to plan, apply and pay for college and sponsored by the North Carolina State Education Assistance Authority, Pathways of North Carolina and College Foundation, Inc.

Submitted by: Elizabeth V. McDuffie

South Carolina Report
The South Carolina Student Loan Corporation will hold its Annual Loan Programs Workshop on March 11, 2003 in Columbia, SC. Workshop topics will include Navigating our Web Site, Adverse Credit Determinations, Mapping Your Future, Repayment Options, Separation Date Reporting to the NSLDS and the Clearinghouse, Training for New Financial Aid Staff, Debt Management, and a Reauthorization Update.

For nine months of the year the Corporation offers training opportunities at its office. Our in-house training series was designed to afford our colleagues the opportunity to learn or revisit important subject matter in a relaxed, yet professional manner. By keeping the number of people in each session low, usually 6 - 10, instructors are able to provide attendees with more of a one-on-one approach. Training session topics include Certifying and Recertifying Loans, Receiving and Returning Funds, Borrower Rights and Responsibilities, Repayment Options and Maintaining a Low Default Rate, just to name a few. Our sessions are well received and well attended.

The Corporation has developed a new program called the "$1K Giveaway!" Each month the Corporation will be awarding a $1000 scholarship to a student who registers on our web site. Students who take out a Federal Stafford or alternative loan are automatically entered as well. The Corporation's first drawing to award scholarships for the 2002 - 2003 academic year will be March 15 and will be held monthly thereafter. Registrants' names are kept "in the pot" and will remain eligible until September 14. Beginning September 15 new registrations will be accepted for the 2003-04 academic year.

Last summer, 9 high school guidance counselors from across the state participated in the Guidance Counselor Internship Program sponsored by the South Carolina Student Loan Corporation and the South Carolina Association of Student Financial Aid Administrators (SCASFAA). This program is designed to enable counselors to be better prepared to assist students and parents in gaining an awareness of the financial aid process and the availability of student financial assistance. The counselors agreed that they learned information about student financial aid that made them a more effective counselor, and strongly agreed that they would recommend the program to a colleague. The Corporation is pleased to be a part of this exciting program.

The Corporation is pleased to report that its Federal Stafford Loan volume has increased 11% over last year and the Federal PLUS loan volume has increased over 21%.

Submitted by: Cheryl Hughes

SC Tuition Grants Program
On December 9, 1999, the SC Tuition Grants Commission unanimously adopted a provision that, beginning with the 2000-2001 award year, would raise/lower maximum grants on a schedule at all 20 participating SC independent colleges to a $3,100 program-wide maximum grant. At the time of the policy change, maximum grants at 14 colleges were below the $3,100 figure, and maximum grants at 6 colleges were above the $3,100 amount. The provision established a maximum of 5 years for the conversion to the $3,100 maximum grant and also provided that upperclassmen were to be held harmless through graduation.

Mid-year budget reductions experienced in 2000-2001 and 2001-2002 totaling almost $2 million plus the addition of almost 1,500 additional eligible students in the award pool mandated that the targeted program-wide maximum be reduced from $3,100 to $2,200. The $3.5 million received in 2002-2003 in one-time lottery dollars basically made a one-time replacement of the base funds lost through budget reductions, but unless the lottery funds are annualized will do little toward the goal of reaching the $3,100 program wide maximum grant. A temporary proviso was also included in the 2002-2003 budget bill that exempts the grant funds from mandated mid-year budget reductions.

The state budget request presented for the upcoming year is related to the program increase needed to get all eligible students to a $3,100 program-wide maximum grant and hold harmless the upperclass students in 2003-2004. Should insufficient funds be appropriated to meet that request, a minimum increase of $1.8 million is needed to continue on schedule with the 4th year of the conversion to the $2,200 reduced program-wide maximum grant and hold harmless the upperclass students. The request would also include that lottery funds received by the SC Tuition Grants Program be made permanent and that the temporary proviso exempting the SC Tuition Grants Program from mid-year budget reductions also be made permanent. A new permanent proviso is being requested that would guarantee, similar to the Palmetto Fellows and LIFE Programs, sufficient funds each year for the SC Tuition Grants Program to cover all eligible applicants applying through the June 30 application deadline at the maximum grant level equal to 60% of the average per undergraduate student subsidy ($5,316) at the SC four-year public colleges in the prior-prior year. Since the current SC Tuition Grants statute allows the maximum award to be as high as the average per student subsidy at the SC public colleges, the methodology of computing the maximum award as 60% of the public college per student subsidy is consistent with the statute.

Submitted by: Eddie Shannon

Tennessee Report
On December 1, 2002, Michael C. Roberts was appointed Executive Director of the agency. Michael's previous position was Compliance Administrator at TSAC. He has served in this position for more than 8 years. Prior to that, Michael was financial aid director at a number of schools; Lane College (TN), Franklin College (IN), and the University of Tennessee at Chattanooga.

Over the years, many of you have worked with Jan Lassiter, TSAC Administrative Assistant. Jan retired on December 31, 2002 after faithful service of 30 years with TSAC. Jan will definitely be missed. We wish her much success in her new endeavors.

TSAC will continue to sponsor training workshops.

A Lottery Task Force was formed to recommend a lottery scholarship system for Tennessee students. The work on this effort is proceeding, and the state legislature may act on recommendations during the current legislative session. TSAC and TASFAA have submitted recommendations on the administration of this new source of financial assistance. It is expected that funds will be available to students for the 2004-05 academic year.

Submitted by: Michael C. Roberts