State Treasurer Ken Duncan reported earnings for the first quarter of FY 1997-98 in excess of 6 percent for both START Saving Program grant and investor funds. Duncan stated that investor funds (START account holder deposits) earned an annualized rate of 6.1 percent for the period, while grant funds (state appropriations earmarked for matching Tuition Assistance Grants) earned an annualized rate of 6.4 percent. The combined annualized earnings of investor and grant funds was 6.14 percent. Duncan presented the report to the Louisiana Tuition Trust Authority (LATTA) at its November 12 meeting.Duncan stated that the investment strategy applied to START funds included the following objectives:
Duncan added that START funds were invested in the State Treasury investment pool as well as in Treasury and Agency securities and noted that START account earnings outperformed treasury bills, certificates of deposit and passbook savings accounts during the first quarter of FY 1997-98.In conclusion Duncan said, "It is essential to lay a secure foundation for the future of our state. We are investing money today to provide for the education of our children and grandchildren who will lead Louisiana in the 21st century. This tax-deferred investment account," he continued, "is enriched with interest and state matching grant contributions and will provide a revenue source to offset the rising cost of a college education." Account balances, including interest, as of September 30, 1997, were $138,258 in the investor fund and $108,729 in the grant fund.
START, an acronym for the Student Tuition Assistance and Revenue Trust Program, is an innovative program that encourages families to save for the education of their children and grandchildren. Parents, grandparents, and legal guardians may establish a college savings account to benefit their child or grandchild.
The feature which makes the START Saving Program unique among savings plans is that, for the average family that has less than $100,000 in annual income, the State of Louisiana will award an incentive to save by matching a percentage of the familys annual deposits. Deposits into individual accounts are pooled and invested, and the investments are professionally managed by the State Treasurer.The program charges no enrollment or investment fees because the state pays all the costs of operating the program, which is assurance to an account holder that every cent deposited will earn interest to their benefit. Parents may open a college savings account for each of their children and are encouraged to make regular monthly deposits into these accounts.
Deposits and state-awarded incentives both earn interest at competitive rates, and earnings used to pay the cost of education are not taxed by the state. Federal taxes on earnings are deferred until the earnings are disbursed and taxed at the beneficiarys tax rate (which is normally a lower rate) when used for educational expenses.Accounts may be opened for beneficiaries of any age during the annual open enrollment period. Accounts may be opened at any time for newborns under one year old. For an application, check your local library or call 1-800-259-5626, ext. 1012.
In response to public demand, the Louisiana Tuition Trust Authority (LATTA) extended the START Saving Programs open enrollment to December 1. Hundreds of Louisiana residents took advantage of the extension and opened accounts for their children and grandchildren.
As of November 19, 1997, a total of 919 saving accounts (representing deposits by individuals of $247,440.00) had been opened, more than double the previous total of 409 accounts that had been opened between July 30 and October 31. Only 121 START Saving accounts were opened during the programs first two months, July 30 through September 30. As public service announcements, media news coverage and media interviews increased, public awareness mounted. During the month of October, which was originally scheduled to be the final month of the 1997 open enrollment period, 288 additional accounts were opened.
In what was to have been the final week of the open enrollment period, LOSFA received hundreds of calls from parents and grandparents asking for program applications and more time to respond. Many public libraries throughout the state, which were distributing the programs applications, had exhausted their supply and requested additional shipments.
Supplies were replenished for the month-long extension to allow a greater number of families to take advantage of this new program. Following the announcement of the extension, an additional 510 accounts were opened during the first three weeks of November. As of this writing, one week remains in the extended open enrollment period, and the number of applications being received daily has not abated.
Louisiana Governor M. J. "Mike" Foster, Jr., a proponent of the START Saving Program and under whose administration the program was first funded, commented that, "Our objective with this program is to encourage families to save for education. If extending the enrollment period furthers that objective, then weve made a good decision that serves the public interest."
In reviewing the demographics of beneficiaries for whom START accounts have been opened, START program manager Juanita Rougeau has noted some emerging patterns. Of the 711 accounts opened as of November 3, 1997, Rougeau has recorded the number of accounts by the age of the beneficiary and corresponding percentage of total accounts represented by each age level. "Interestingly, we are finding three almost equal peaks at the ages of two, nine and thirteen," Rougeau said. "These peaks are not that surprising," Rougeau continued, "when you consider that these are the ages when children are entering preschool, moving from lower to upper elementary school, and from junior to senior high school. These are the milestone events in a childs educational progression and times when parents might be more likely to think ahead toward the college years."
Rougeau also noted "clusters" of account openings for children aged 5-8 and 10-12 which occur just before the peak beneficiary ages of nine and thirteen.
LOSFA MAILS LOUISIANA HONORS SCHOLARSHIP LETTERS Letters were mailed in mid-November to 950 students who had been named Louisiana Honors Scholars in 1996, but who had not utilized the award. The letters reminded these students that they were no longer prohibited from accepting the Louisiana Honors Scholarship concurrently with other awards from their college or university, if (1) the university award is not limited to the payment of tuition; (2) the acceptance of the Louisiana Honors Scholarship will not cause the students financial aid to exceed the institution's cost of attendance; and (3) the university scholarship does not prohibit concurrent acceptance.
Honors Scholars of 1996 must be enrolled in eligible Louisiana institutions and accept the Honors Scholarship award no later than the 1998 spring term, or they will lose future program eligibility. If a student was enrolled in college after graduating from high school, he must have earned a cumulative college grade point average of at least a 3.00 on a 4.00 scale at the conclusion of the Spring 1997 term.
The Louisiana Honors Scholarship Program will terminate at the conclusion of this academic year. Recipients of the scholarship who would otherwise be eligible to continue in the program will be awarded the Tuition Opportunity Program for Students (TOPS) Performance Award, which includes tuition plus an annual $400 stipend.
To begin receiving their awards, 1996 scholars were instructed to contact the Scholarship Section of LOSFA by calling 1-800-259-5626, ext. 1151, or (225) 922-1151.
The spirit of United Way giving is alive and well at LOSFA. Our employees are generous contributors to United Way and to numerous other worthy causes. This year, as in previous years, LOSFA continues to be a member of the Honor Roll Companies/Employees by contributing well over $5,000 to the 1997 Capital Area United Way Campaign. We at LOSFA are proud of our community, and were proud to be an active part of the United Way.
Dates and locations of the LOSFA Guidance Counselor Workshops are as follows: Wednesday, December 3, in the Burton Business Center Conference Room at McNeese State University in Lake Charles;
Monday, December 8, at Holiday Inn Veterans in Metairie;
Tuesday, December 9, at the Best Western Hotel Acadiana in Lafayette;
Wednesday, December 10, at the Hampton Inn Convention Center in Alexandria; Thursday, December 11, at the Ramada Inn in Shreveport;
Friday, December 12, at the Holiday Inn Civic Center in Monroe; and
Monday, December 15, at the Baton Rouge Radisson Hotel.
All workshops will begin at 8:30 a.m. and conclude at 12:30 p.m.
Newsline On-Line. Cant wait for your copy of Newsline to arrive in the mail? You dont have to, anymore. Simply check the LOSFA web site periodically. A text-only version of Newsline will be posted to our web site approximately one week before you receive it in the mail. The address is http://www/osfa.state.la.us. Click the Information Center icon on the home page, and then select the Newsline menu listing. When you reach the Newsline page, select the issue you would like to view. You will then find a listing of story titles from the selected issue. Simply click the one you wish to read. The LOSFA web site also contains back issues of Newsline in case you missed an issue or would like to refer back to an article from a previous issue.
USA Group Guarantee Services and LOSFA jointly hosted a WhizKid Training Workshop on Friday, November 14 at Our Lady of Holy Cross College in New Orleans. Scott Tubbs of USA Group presented the training session. Workshop topics included identification of what should be "Setup" in WhizKid before processing a loan (such as loan preferences and maintenance windows), the basics of entering a loan application, and how to import. Also discussed were communications (transmitting and receiving data files), change transactions, setting up WhizKid for CommonLine loan processing, WhizKid for Windows 5.40 Exclusive, and an overview of USA Groups Online Loan Connection.
In October, the Pre-Claim section prevented 2,355 accounts, totaling $11,572,175, from entering default. This is the second highest number and the highest dollar amount ever achieved for aversions in a month.
Final regulations on financial responsibility changing provisions of 34 CFR 668 were published on November 25, 1997. These regulations go into effect on July 1, 1998. The new financial standards will be applied to institutions that submit audited financial statements to USDE on or after July 1, 1998; however, affected institutions will not have to comply with the information collection requirements of these regulations until the control number assigned by OMB is published in the Federal Register. Watch next months Newsline for more information about these final regulations.
AWG BREAKS RECORD
The Collections Section specialty unit which manages the Administrative Wage Garnishment (AWG) program recovered a record $241,131.47 in October and exceeded that total in November by recovering $247,350.00. These collection amounts include both garnished wages and voluntary payments from borrowers wishing to avoid the mandatory withholding procedure. AWG is used only for student loan borrowers who fail to make satisfactory payment arrangements on their defaulted loans.
The administrative procedure starts when the AWG Unit accesses information from the Louisiana Department of Labor to determine if the defaulted borrower is employed and how much income he or she earns. The garnishment amount is calculated to be 10 percent of the borrowers income after required deductions.
LOSFA mails a warning letter to borrowers whose wages can be garnished, giving them 30 days to make an initial payment under a satisfactory payment arrangement. The letter warns that if the borrower does not begin making voluntary payments, his or her income will be garnished. The minimum amount acceptable under a voluntary payment agreement is normally the 10 percent garnishment amount.
If the borrower does not respond within the allotted 30 days, LOSFA issues a withholding order to the borrowers employer. The employer is required to comply with the order and remit withheld wages to the AWG Unit on a monthly basis.
USA Group Guarantee Services, LOSFA's software contractor, announced plans to replace the DOS version of WhizKid with WhizKid for Windows in March, 1998. WhizKid for Windows, which is three years old, not only performs all loan processing functions offered by WhizKid DOS but also offers expanded capability to perform additional functions.
WhizKid DOS, along with several other USA Group proprietary file formats, will become obsolete upon retirement, and support of the files will be discontinued.
File formats that will be discontinued and replaced by CommonLine formats include:
Copies of the new CommonLine file formats may be obtained through Electronic Services at 800-348-4606. Customers having questions about the retirement of WhizKid DOS or proprietary file formats, or who would like to request the newest version of WhizKid for Windows, may contact LOSFA Customer Services at 1-800-259-5626, ext. 1012 or their USA Group marketing representative.
The U. S. Department of Education has released the 1995 Cohort Default Rates for schools, lenders, loan holders, and guarantee agencies participating in the Federal Family Education Loan Program (FFELP).
For the fifth consecutive year, LOSFA has experienced a decrease in its cohort default rate. Its 1995 rate of 15.3 percent compares favorably to its previous rates of 36.1 percent, 33.1 percent, 26.3 percent and 16.1 percent, posted for the years 1991 through 1994, respectively.
As the designated guarantor of student loans for Louisiana, LOSFA devotes considerable resources to default prevention efforts. During fiscal year 1996-97, the Pre-Claim Section successfully restored to repayment 79 percent of the seriously delinquent student loan accounts which were reported, averting over $94 million in potential loan defaults.
Louisiana's colleges, universities and lenders have also made significant contributions to cutting student loan defaults. Campus financial aid offices provide valuable entrance and exit counseling to students about the prudent use of debt to finance their education and their obligations and options for repaying the debt after completing their education. Lenders and servicers offer flexible repayment plans, which help graduates pay back their education debt based on their income.
For more information about cohort default rates, call the USDE Default Management Hotline at (202)708-9396, or contact LOSFA Program Review at 1-800-259-5626, ext. 2030.
You should be searching for scholarships.
Now is the time to work with your Guidance Counselors to help your classmates search for private sources of scholarships and grants.
One of your best sources of scholarship
information is the Internet, where there are a number of good databases that you can
easily access for information and assistance. Encourage your classmates to access only the
free sites, which include, among others: www.finaid.com,
LOSFAs web site, www.osfa.state.la.us, contains the most up-to-date information about the new Tuition Opportunity Program for Students (TOPS) as well as general information about other types of financial aid that are available.
You should be distributing the Blue Book and FAFSAs.
The Louisiana Financial Aid Handbook (the "Blue Book") for academic year 1998-99 has arrived. It contains vital information about the process of college admission and financial assistance. If your school did not receive a shipment of Blue Books, ask your counselor to call LOSFA at 1-800-259-5626, ext. 1012 to place an order.
Copies of the 1998-99 Free Application for Federal Student Aid (FAFSA) are ready for mailing from the U.S. Department of Education. You and your classmates should file the FAFSA as soon as possible after January 1, 1998. Remember that you must file it not later than June 1, 1998 to be eligible for the TOPS program. You may order a supply of FAFSAs by calling 1-800-394-7084. Both the Blue Book and the FAFSA are provided free of charge.
You should be taking the ACT test.
You and your classmates should take or re-take the ACT test to attain the highest score possible. LOSFA will consider the best ACT score achieved before graduation in determining eligibility for TOPS awards.
You should be finding out as much as possible about the schools you are interested in attending.
If you have not done so already, start by requesting an admissions application and information about housing and financial aid. Visit the schools that interest you and start preparing the materials you will need to submit with your application, such as letters of recommendation, essays, or writing samples. It is also important that you discuss your financial aid options with your parents and counselors.
If you, your counselors, or your classmates are in need of assistance with any of these activities, call Customer Services at 1-800-259-5626, ext. 1012.
COMMON MANUAL UPDATE:
|LOUISIANA STUDENT FINANCIAL ASSISTANCE COMMISSION
OFFICE OF STUDENT FINANCIAL ASSISTANCE
LOAN PROGRAM MEMORANDUM
To assure that your Common Manual remains current, file and maintain this index in the front of your manual's Appendix E, and record each LPM/LPB as received.
|LPB||3/12/97||More Disaster Areas Declared|
|LPB||3/17/97||Additional Disaster Areas|
|L97-4||3/27/97||Common Manual Updates #153-159, 161, 162, 163 &118|
|LPB||4/1/97||Disaster Areas Declared in Arkansas, Illinois, Indiana, Kentucky, Ohio, Tennessee, and West Virginia|
|LPB||4/4/97||Special Allowance Rates Calculated from Quarter Ending March 31, 1997|
|LPB||4/14/97||Disaster Areas Declared in Arkansas, Minnesota, North & South Dakota & Tennessee|
|L97-5||5/6/97||Common Manual Updates #123, 124, 132, 137, 160, 164, 165, 166, 136, 141, 150|
|LPB||5/14/97||New Disaster Areas in Minnesota and Liberalized Policies for parts of North Dakota|
|LPB||6/2/97||New Economic Hardship Form Approved|
|L97-6||6/9/97||Consolidation Loan Reporting Timeframe Extended|
|LPB||6/9/97||New Variable Interest Rates 7/1/97- 6/30/97|
|LPB||6/16/97||Late Disbursement Checklists for Lenders and Schools|
|LPB||6/19/97||Important Information about Electronic Transmission of CommonLine Application Records with Second Line Address Information|
|L97-7||6/24/97||Common Manual Updates #167-177|
|L97-8||6/24/97||Cash Management Regulation Effective Date Trigger Event Changes|
|LPB||6/30/97||Deactivated Lenders and Voluntary Withdrawal of School|
|LPB||7/3/97||Special Allowance Rates Calculated from Quarter Ending June 30, 1997|
|LPB||7/21/97||1997-98 Teacher Shortage Areas in Louisiana|
|L97-9||7/23/97||Common Manual Updates #116,140, 178, 179, 180, 181|
|LPB||8/11/97||Disaster Areas Declared in Michigan, Texas, Wisconsin & Vermont|
|LPB||8/25/97||USDE Reverses Position - School Remains Eligible|
|LPB||8/26/97||Large Disbursement Files May Delay EFT Information Processing|
|LPB||8/27/97||Disaster Areas Declared in Alabama and Colorado|
|LPB||9/15/97||Disaster Areas Declared in Minnesota and Vermont|
|LPB||9/15/97||Bosnia Military Mobilization|
|LPB||9/22/97||Deadline Dates for Schools to use Designated Electronic Processes|
|LPB||9/25/97||New Disaster Areas and Interim Guidance Made Policy by USDE|
|L97-10||9/29/97||Common Manual Updates|
|LPB||9/29/97||Administrative Forbearance for Borrowers with Hardship in Consolidating Loans into the U.S.D.E.s Direct Consol Loan Program|
|LPB||10/1/97||New Disaster Area Declared|
|LPB||10/7/97||Special Allowance Rates Calculated from quarter ending September 30, 1997|
|LPB||10/7/97||USDE Decision Final - School Ineligible|
|L97-11||10/14/97||Common Manual Update - Consolidation Loan Reporting Penalties|