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150% Subsidized Loan Eligibility

150% Subsidized Loan Eligibility. 2013 Tri-State Fall Conference Angie Hovatter Andrew Harvey. Who’s Counting. Public Law 112-141. Moving Ahead for Progress in the 21 st Century (MAP 21) – enacted July 6, 2012. Amended the HEA to establish a limit on Direct Subsidized Loan eligibility

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150% Subsidized Loan Eligibility

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  1. 150% Subsidized Loan Eligibility 2013 Tri-State Fall Conference Angie Hovatter Andrew Harvey

  2. Who’s Counting

  3. Public Law 112-141 • Moving Ahead for Progress in the 21st Century (MAP 21) – enacted July 6, 2012. • Amended the HEA to establish a limit on Direct Subsidized Loan eligibility • Waived requirement for negotiated rulemaking and master calendar.

  4. What did it say? • A new borrower on or after July 1st, 2013 cannot receive subsidized loans for more than 150% of the published length of the borrower’s educational program.

  5. Affects only 1st time borrowers • NO effect on Unsubsidized Loans or PLUS loans • Determining When 150% Limit is Met • Maximum Eligibility Period (less) Total Subsidized Usage Periods (equals) Remaining Eligibility Period

  6. Maximum Eligibility Period Examples

  7. Direct Subsidized Loan Limitation • Student’s maximum time to receive Direct Subsidized Loans is established based on the length of the program in which the student is currently enrolled.

  8. Examples

  9. Student receives 3 full years of Direct Subsidized Loans while enrolled in two-year program. • Max = 3 years (less) Usage (3 years) = ZERO remaining eligiblity.

  10. Student receives 3 full years of Direct Subsidized loans while enrolled in a two-year program. • Student transfers to a four-year program. • Maximum Eligibility Period = 6 years. • Total Usage = 3 Years • Remaining Eligibilty = 3 Years

  11. Student receives 2 full years of Direct Subsidized Loans while enrolled in a four-year program. • Student transfers to a two-year certificate program. • Maximum Eligibility = 3 years • Total Usage = 2 years • Remaining Eligibility = 1 year

  12. Student receives 5 full years of Direct Subsidized Loans while enrolled in a four-year program. • Student enrolls in another four-year program. • Maximum Eligibility Period = 6 year • Total Usage = 5 years • Remaining Eligibility = 1 year

  13. Student receives 6 full years of Direct Subsidized Loans while enrolled in a four-year program. • Student continues enrollment in the same four-year program. • Maximum Eligibility = 6 years • Total Usage = 6 years • Remaining Eligibility =ZERO

  14. Student received on Direct Subsidized Loan while enrolled in an 18-week certificate program. • Student enrolls in a two-year program. • Maximum Eligibility = 3 years • Total Usage = 0.50 years • Remaining Eligbility = 2.5 years

  15. Loss of Interest Subsidy • Borrower responsible for interest triggered from date of continued or subsequent enrollment. • Responsible for interest whether or not student continues borrowing. • Loan remains Direct Subsidized Loan (just loses subsidy) • Lost interest subsidy on a loan cannot be regained.

  16. Borrower enrolls in a four-year program (max 6 years) • Received 4 years of Direct Subsidized Loans. • Has 2 years remaining in eligibility. • Borrower transfers to a two-year program (max 3 years) • Borrower has NO REMAINIG ELIGIBILITY.

  17. Whose keeping track? • ED/FSA will calculate, and inform students • CPS – Codes and Comments on SAR/ISIR • NSLDS – New Borrower • NSLDS – Loss of Subsidy Indicator • COD – Reports to School • COD – Editing & Enforcement • Direct Loan Servicers – Loss of Subsidy Benefits

  18. What you we have to do? • Report and Update enrollment and loan period • <AcademicYearBeginDate> &<AcademicYearEndDate> • <FinancialAidBeginDate> & <FinancialAidEndDate>

  19. 2014-2015 and beyond • Additional Information to Report • Student’s Enrollment Leve (FT, TQT, HT) • Classification of Instructional Program Code (CIP) • Credential Level (Certificate, Diploma, Degree) • Length of Program (years, months, weeks) • Special Program Flag (Teacher Certification, Preparatory)

  20. Entrance Counseling http://ifap.ed.gov/eannouncements/attachments/051613DirectSubsidizedLoanLimit150PercentAnnounce1Attach.pdf

  21. Additional Resources • Dear Colleague Letter GEN-13-13 • 150% Webinar (June 4 or June 6) • FSA Handbook (Chapter 6 – Eligibility for Specific FSA Programs) pg 1-71 • NASFAA Your Questions Answered: The 150 Percent Rule

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