Transcript Document

150% Direct
Subsidized Loan Limit
The Basics
Heather Fountain
Agenda
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Terminology and Definitions
Determining Eligibility
CPS and NSLDS
School Reporting
Updating Loan Records
Agenda
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Beginning Attendance
Return of Title IV Aid
Cost
of Attendanceand
Proration
Terminology
Definitions
Award Proration
150% Subsidized Loan Limits
600% Pell Limit
Satisfactory Academic Progress
Scholarships
First-Time Borrowers
• Affects only first-time borrowers as of July 1, 2013.
• First-time undergraduate borrowers who have no
outstanding balance of principal or interest on a
Direct Loan or FFEL loan
– On July 1, 2013
OR
– On the date the borrower obtains a Direct Loan after
July 1, 2013
• Example: Borrower had a balance on July 1, 2013 but paid it
off in full prior to receiving loans after July 1, 2013.
Loss of Subsidized Loan Eligibility
• First-time undergraduate borrowers are no
longer eligible for Direct Subsidized Loans
once the borrower has received Direct
Subsidized Loans for a period that is 150% of
the published length of the borrower’s current
educational program.
• No effect on Unsubsidized Loan or PLUS
Loan eligibility.
• No change to lifetime loan limits. 150% is in
addition to, not in place of.
New Acronyms
• Maximum Eligibility Period (MEP) - 150%
of the published length of the educational
program in which borrower is currently
enrolled.
• Subsidized Usage Period (SUP) - Period of
time for which a borrower received a Direct
Subsidized Loan.
• Remaining Eligibility Period (REP) Difference between the Maximum Eligibility
Period and the total of all Subsidized Usage
Period.
Agenda
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Beginning Attendance
Return of Title IV Aid
Cost of
Attendance Proration
Determining
Eligibility
Award Proration
150% Subsidized Loan Limits
600% Pell Limit
Satisfactory Academic Progress
Scholarships
Determining Eligibility
Maximum Eligibility Period
Minus
Subsidized Usage Period
Equals
Remaining Eligibility Period
MEP-SUP=REP
Determining Eligibility
• 150% limit is reached when Remaining
Eligibility Period equals zero (or less than
zero)
• ED calculates these components based on
the information schools provide
• Timely reporting of information and
corrections is important!
Subsidized usage period
• Period of time during which the borrower receives
subsidized loans.
• SUP does not take into account the amount borrowed,
only the period of time for which subsidized loans are
received.
Number of days in the borrower’s loan period
Number of days in borrower’s academic year
• Result is rounded up or down (as appropriate) to the
nearest tenth of a year.
• Calculated by COD based on school provided
information.
Example
• Scheduled Academic Year
– Smith College has a semester-based academic year
made up of fall and spring terms. The fall term begins on
August 29 and the spring term ends on May 18. There
are 267 days in the loan period and academic year.
– The student received a subsidized loan for both terms.
• How many days are in the loan period?
• How many days are in the academic year?
• What is the subsidized usage period?
267 days in the loan period
__________________________
267 days in the academic year
= 1.0 SUP
Exceptions
• Student’s SUP will be adjusted for enrollment
less than full time.
• SUP will be multiplied by
– 0.75 for three-quarter time enrollment
– 0.50 for half-time enrollment
• Example: Smith College has 267 days in their
loan period and academic year. If a student
receives a subsidized loan for three-quarter
time enrollment for both terms, the SUP would
be adjusted accordingly.
267 days in loan period
267 days in academic year
= 1.0 SUP
1.0 SUP x 0.75 enrollment adjustment = 0.75 SUP
0.75 SUP would then be rounded up to equal 0.8 adjusted SUP
Exceptions
• For standard term programs or non-standard term
programs with substantially equal and at least nineweek terms
– If the full annual subsidized loan limit is borrowed for a
loan period that is shorter than a full academic year, the
SUP would be considered 1.0.
• Example: A freshman student attending full-time at
Smith College receives $3500 in subsidized loans for
the fall semester only. There are 119 days in the loan
period and 267 days in the academic year.
119 days in loan period
267 days in academic year
= 0.45 SUP
0.45 would be rounded up to 0.50, but SUP is 1.0
• Because student received full annual subsidized loan amount for fall
only and was enrolled full-time, SUP is considered to be 1.0.
Exceptions
• Example: A freshman student attending halftime at Smith College receives $3500 in
subsidized loans for the fall semester only.
There are 119 days in the loan period and
267 days in the academic year.
119 days in loan period
267 days in academic year
= 0.45 SUP
0.45 would be rounded up to 0.50, but SUP is 1.0
1.0 x 0.5 enrollment adjustment = 0.5 SUP
• Because student received full annual subsidized loan amount
for fall only, SUP is considered to be 1.0.
• However, because student was only enrolled half-time, we must
prorate based on enrollment.
Exceptions
• Example: A graduating senior attending fulltime at Smith College receives his maximum
prorated eligibility of $2750 in subsidized
loans for the fall semester only. There are
119 days in the loan period and 267 days in
the academic year.
119 days in loan period
267 days in academic year
= 0.45 SUP
0.45 would be rounded up to 0.50 SUP
• Because the student is enrolled in his final period of enrollment and
is subject to proration of his loans, he is not considered to have
borrowed the full annual loan limit and therefore not subjected to
the increased SUP of 1.0.
Remaining Eligibility Period
• Compares the Maximum Eligibility
Period to the total of all Subsidized
Usage Periods.
• 150% limit met when Remaining
Eligibility Period is equal to or less
than zero.
Loss of Interest Subsidy Benefits
• A first time borrower who has no remaining
eligibility for subsidized loans; loses interest
subsidy on subsidized loans if the borrower
– Received subsidized loans to fund enrollment for
150 percent of the length of the program of study
AND
– Did not complete the program
AND
– Continues enrollment on at least half-time basis in
the same program
OR
– Enrolls in another program of the same or shorter
length on at least a half-time basis.
Loss of Interest Subsidy Benefits
• Borrower responsible for interest triggered from the date of
continued or subsequent (at least half-time) enrollment in an
eligible undergraduate program of equal or lesser length.
– Whether or not student continues Direct Loan borrowing.
 Unpaid accrued interest is capitalized in same manner as for
Direct Unsubsidized Loans.
 Responsible for loans accruing interest during
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Periods of at least half-time enrollment
Grace Period
Deferment Periods
Certain periods when repaying under Pay As You Earn or IncomeBased Repayment plans
– Loan remains a Direct Subsidized loan.
• Lost interest subsidy on a loan cannot be regained.
Changing Programs
• ED will re-calculate the MEP and REP
based on criteria related to the borrower’s
new program as reported by the school.
• How might this affect a student’s eligibility?
Changing Programs Example
• Transferring to a longer program
– Meredith receives 3 full years of subsidized loans
while she was enrolled in a 2 year program. She
then transfers to a 4 year program.
– What is her MEP in the 4 year program?
– Does she have any remaining eligibility?
4 year program x 150% = 6 year Maximum Eligibility Period
6 year Maximum Eligibility Period
- 3 year Subsidized Usage Period
______________________________
3 year Remaining Eligibility Period
Changing Programs Example
• Transferring to a shorter program
– David receives 3 full years of subsidized loans while
he is enrolled in a 4 year program and does not
complete that program. He then transfers to a 2 year
program.
– What is his MEP for the 2 year program?
– Does he have any remaining eligibility?
– Has he lost interest subsidy?
2 year program x 150% = 3 year Maximum Eligibility Period
3 year Maximum Eligibility Period
- 3 year Subsidized Usage Period
______________________________
0 year Remaining Eligibility Period
Agenda
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Beginning Attendance
Return of Title IV Aid
Cost of Attendance
CPS andProration
NSLDS
Award Proration
150% Subsidized Loan Limits
600% Pell Limit
Satisfactory Academic Progress
Scholarships
• ED/FSA will track, calculate, and inform
students and institutions.
• Schools will report accurate data about
student’s program, enrollment and loan
period; and will update when needed.
• Direct Loan Servicers will inform students
of loss of subsidy benefits.
CPS
• CPS – Codes and
comments on SARs
and ISIRs beginning
with 2014-15 FAFSA
processing.
NSLDS
• New Borrower
• Subsidized Usage
Period
• Loss of Subsidy
Indicator
Agenda
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Beginning Attendance
Return of Title IV Aid
Cost of Attendance
Proration
School Reporting
Award Proration
150% Subsidized Loan Limits
600% Pell Limit
Satisfactory Academic Progress
Scholarships
School Reporting
• Each time a school submits an origination or
disbursement record COD will:
– Calculate SUP including the new loan
– Inform the school of the borrower’s maximum
eligibility period, subsidized usage period, and
remaining eligibility period.
– Reject loan if student has no remaining eligibility
period.
• COD will also inform borrower in a disclosure
statement.
School Reporting
• Loan Date Reporting to COD – Effective
for all 2013-2014 loans, schools must
– Correctly report to COD a direct loan’s
academic year and loan period dates; and
– Update these dates when necessary
• Incorrect reporting could result in borrower
losing eligibility for subsidized loans or
receiving a subsidized loan incorrectly.
Reporting loan period & academic
year
• Loan Period – period of enrollment for
which the borrower received the loan.
• Academic Year – period to which the
annual loan limit applies.
• Determines the Subsidized Usage Period
School reporting
• Beginning with 2014-2015 schools will report to
COD and to NSLDS additional student and
program information
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Student’s Enrollment Level (FT, TQT, HT)
CIP Code
Credential Level (Certificate, Diploma, Degree)
Program Length
Length of Title IV Academic Year
Flags for Prep Coursework
Flags for Teacher Certification
Payment Period Begin Date
Enrollment reporting
• Schools will need to work with Registrar
and/or servicers to report current
enrollment information.
• ED reminder: Schools are liable for
enrollment reporting even if a third party
servicer is used for tracking.
• Deadline for new enrollment reporting was
October 1.
Maximum eligibility period
• Schools must report the academic program
length in years, months or weeks
• MEP will display in the COD system in
academic years
Program Length
150 Percent (MEP)
5 years
7.5 years
4 years
6 years
2 years
3 years
20 weeks
30 weeks
Number of days in the month or weeks of program length
Number of days in the school’s academic year
Example
• A school’s defined academic year is 32 weeks,
or 224 days (32 weeks x 7 days per week =
224 days). Every month is considered to have
30 days.
Conversion to Days
Program Length
Program Length
(Based on 7 days per week or
30 days per month)
(Based on 224 days per
academic year)
16 weeks
112 days
112/224 = 0.50 years
0.75 years
20 weeks
140 days
140/224 = 0.63 years
0.94 years
30 weeks
210 days
210/224 = 0.94 years
1.41 years
3 months
90 days
90/224 = 0.40 years
0.60 years
6 months
180 days
180/224 = 0.80 years
1.20 years
Maximum Eligibility
Period (150 percent)
Maximum Eligibility
Period Exceptions
• Certain 2 year bachelor’s degree programs
that meet specific criteria are considered
equivalent to those bachelor’s degree
programs that are 4 years in length.
– Bachelor’s degree program AND
– Requires associate degree OR
– Successful completion of at least two years of
postsecondary coursework from an eligible
program as a prerequisite for admission.
• Must report program length as 4 years.
– Ensures 6 years of maximum eligibility.
Maximum Eligibility
Period Exceptions
• Associate degree programs that are designed
specifically to confer a more specialized credential
after completion of two years or postsecondary
coursework.
– Must require as a pre-requisite to admission
• Student successfully completed an associate degree OR
• At least two years of postsecondary coursework in an eligible
program AND
• Program must be a selective admission program AND
• Provide academic qualifications necessary for a profession
that requires licensure or a certification by the State in which
the program is offered.
– Must report program length as 4 years.
Preparatory Coursework
• Undergraduate preparatory coursework
– Can receive Federal Direct loans for up to 12 consecutive
months, beginning on the first day of the first loan period.
– Loans received while taking preparatory coursework are
included when determining if a student has received loans
for 150% of the program length.
• Graduate preparatory coursework
– Enrolling will not cause loss of interest subsidy on
previous loans.
– MEP based on most recent undergraduate program in
which they received subsidized loans.
• May borrow subsidized loans for any REP, up to 12 months.
– If MEP has been reached
• May not receive subsidized loans for graduate preparatory
coursework.
• Will retain interest subsidy on previously obtained loans, if not
previously lost.
Examples
• Undergrad Preparatory Coursework
– Nicholas previously enrolled in preparatory coursework for one
year and received a subsidized loan for which ED calculated a
SUP of 1.0. He then enrolls in a 2 year undergraduate program.
• What is his MEP for the 2 year undergraduate program?
• Does the preparatory coursework count toward this eligibility period?
• Graduate Preparatory Coursework
– Sarah used the 6 year MEP to complete a 4 year degree. She is
returning to school to complete preparatory coursework to enroll
in a graduate program.
• Does she have any remaining eligibility for subsidized loans?
• Is she eligible for unsubsidized loans?
• Does she lose her interest subsidy on previously received subsidized
loans?
Teacher Certification
• Teacher certification programs in which the school offers no
academic credential are limited to subsidized loan eligibility
equivalent to 150% of the length of the program.
• Unique aspects to consider
– Only subsidized loans received for teacher certification
coursework are counted; no subsidized loans borrowed for prior
enrollment are taken into consideration.
– Borrowers in these programs who exceed 150 percent
• Will not lose interest subsidy on loans obtained for this coursework.
• Cannot receive additional subsidized loans for the remainder of their
program.
– Subsidized loans received while taking teacher certification
coursework are not taken into consideration when determining
eligibility for any other eligible program the student may enroll.
Example
Matthew has used 6 years of subsidized loan eligibility to
complete a 4 year program. He decides to enroll in
teacher certification coursework, which he is scheduled
to complete in 1 academic year.
• Is his eligibility for subsidized loans affected by his
enrollment in a prior program?
• What is his MEP for the teacher certification
coursework?
• What are the consequences if he exceeds 1.5 years of
enrollment in the teacher certification coursework?
Agenda
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Beginning Attendance
Return of Title IV Aid
CostUpdating
of Attendance
Proration
Loan
Records
Award Proration
150% Subsidized Loan Limits
600% Pell Limit
Satisfactory Academic Progress
Scholarships
Loan Periods
• Student does not enroll for a payment period
covered by the originally reported loan period.
• Student withdraws from a payment period and all
loan funds associated with the period are returned
(R2T4).
• Student cancels an entire payment period’s
disbursement.
• Student is no longer eligible for a loan for a
payment period covered by the loan period.
• Applies to all Direct Loan types for all students.
Example
•
Borrower withdraws after completing one semester.
Student Enrollment Pattern
Anticipated
Actual
Fall and Spring
Fall Only
School’s Reporting to COD
Initial
Updated
Begin Date
End Date
Begin Date
End Date
Loan Period
August 26, 2014
May 9, 2015
August 26, 2014
December 20, 2014
Academic Year
August 26, 2014
May 9, 2015
No Update
No Update
Academic Years
• Student is attending a program for which
summer is not a required term. Attends
summer and receives a loan for summer.
• The student (in clock hour programs, nonterm programs, and non-standard term
NSE9W programs) is not progressing to
the next payment period as scheduled.
Example
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Borrower initially attends fall and spring
semesters and then plans to attend for the
summer term (trailer).
Student Enrollment Pattern
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Anticipated
Actual
Fall and Spring
Fall, Spring, Summer
The school has two options.
Option 1
•
Originate a new loan for the summer term and extend
the academic year ending date for the existing fallspring loan to include the summer term.
School’s Reporting to COD for Fall-Spring Loan
Initial
Updated
Begin Date
End Date
Begin Date
End Date
Loan Period
August 26, 2014
May 9, 2015
No Update
No Update
Academic Year
August 26, 2014
May 9, 2015
August 26, 2014
August 1, 2015
School’s Reporting to COD for Summer-Only Loan
Initial
Updated
Begin Date
End Date
Begin Date
End Date
Loan Period
May 24, 2015
August 1, 2015
No Update
No Update
Academic Year
August 26, 2015
August 1, 2015
No Update
No Update
Option 2
•
Increase the loan amount of the existing fall-spring
loan and extend both the loan period and the
academic year ending dates to include the summer
loan.
School’s Reporting to COD for Fall-Spring-Summer Loan
Initial
Updated
Begin Date
End Date
Begin Date
End Date
Loan Period
August 26, 2014
May 9, 2015
No Update
August 1, 2015
Academic Year
August 26, 2014
May 9, 2015
August 26, 2014
August 1, 2015
Eligibility for Direct
Unsubsidized Loans
• Student can only receive an unsubsidized
loan (base or additional) for a loan period
if the student has received the full amount
of his or her eligibility for a subsidized
loan.
• Student who does not receive his or her
full subsidized loan eligibility may not
receive any unsubsidized loan for the
same loan period.
Eligibility for Direct
Unsubsidized Loans
• Example: Based on COA and EFC a
second year dependent student is eligible
for the full annual subsidized loan amount.
$4500
Base amount Subsidized loan $0
Base amount Unsubsidized loan $2000
Additional amount Unsubsidized loan
Eligibility for Direct
Unsubsidized Loans
• Example: Based on COA and EFC a
second year dependent student is eligible
for the full annual subsidized loan amount.
$4000
– Base amount Subsidized loan $0
– Base amount Unsubsidized loan
$0
– Additional amount Unsubsidized loan
Eligibility for Direct
Unsubsidized Loans
• Example: Based on COA and EFC a
second year dependent student is eligible
for less than the full annual subsidized
loan limit.
$4000
$500
– Base amount Subsidized loan $2000
– Base amount Unsubsidized loan
– Additional amount Unsubsidized loan
Questions?