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I would like to clarify some of the information contained in the FINAID-L discussion on the use of 1997-98 FWS funding.

PublicationDate: 12/11/96
Summary: I would like to clarify some of the information contained in the
FINAID-L discussion on the use of 1997-98 FWS funding.
Author: PDD - Policy Development Division/PTAS


12/11/96

I would like to clarify some of the information contained in the
FINAID-L discussion on the use of 1997-98 FWS funding.

As the financial aid community knows by now, the Congress
appropriated $830 million in FWS funds for next year. This
represents an increase of almost 35% over 1996-97. Note that not all
schools will receive the same % increase due to the complexities of
the allocation formulas contained in the law. Schools should note
that at this time there are no additional requirements for schools with
regard to these increased funds. They are to be used under the same
rules as are currently in place for 1996-97 funds.

It is true that the President will be proposing to the Congress that a
portion (perhaps 50%) of the increase in FWS a school receives for
97-98 over 96-97 be used for Community Service. If, and when, this
proposal is approved by the Congress and signed by the President,
we will provide schools with details regarding effective dates and the
impact of the change on the current 5% rule.

At the same time, the President has announced that he wants to
encourage schools to use FWS funds to support his initiative to help
the children of this country learn to read. In support of that effort,
we have modified the FWS regulations (in a final rule published on
November 27, 1996) to allow a school to utilize up to 100% federal
funds to pay the FWS wages of students employed as reading tutors
(therefore no matching required). There is no proposal in the works
that would require schools to use any FWS funds for this purpose,
only to encourage schools to do so.

To summarize:

(1) FWS funds for 1997-98 are to be used under current rules.
There is no requirement to use those funds for any special
purpose, except for the 5% Community Service requirement
currently in place.

(2) The final regs published in late November allow schools,
beginning with the 1997-98 award year, to waive the matching
requirement in the FWS program for those students employed as
reading tutors for children in pre-school through elementary school.

(3) The President will propose to the Congress that a change be
made to the law that will require schools to use a percentage of their
increased FWS for community service. This change is not currently
in place and any effective date will await final legislative language.

(4) There are no requirements and there are no plans to propose
any requirements that would force schools to use any of their FWS
funding to support reading tutors, only that schools are encouraged
to do so.

I know this issue has been confusing and we hope to get out more
details in our training materials and other publications. Hopefully
this brief overview (even with the spelling errors) will set some
people's minds at ease, while getting others excited about the chance
to help our country by having students help kids learn to read.

Thanks

Jeff Baker, Director
Policy Development Division
Student Financial Assistance Programs
U.S. Department of Education

Last Modified: 08/16/1999