Download Federal Direct Loans (Cont`d) - Sam Houston State University

The State of Financial Aid
Patsy Collins
Director, SMMC
Sam Houston State University
Federal Title IV Trends
Increased Emphasis on Timely Graduation
Reduction in Federal Aid
Programs
Additional Cost to Students
Increased Emphasis on Default Loan Prevention
Satisfactory Academic Progress
Undergraduate GPA
Minimum 2.0
Overall Completion Rate*
75% of Attempted Hours
Maximum Timeframe
150% of the Credit Hours Required for
Graduation
* Recent Program Change – From annual to overall
Pell Grant
Pell Grant
Increased Annual Maximum Amount: $6,465
Expanded EFC Range
2012-2013: $0 - $4,995
2013-2014: $0 - $5,081
Decreased Lifetime Eligibility*
Equivalent of 6 full time years
*Recent Program Change – From 18 semesters to 12 semesters
TEACH Grant
TEACH Grant
New Annual Amount: $3,760*
(Reduced from $4,000 annually)
Federal Direct Loans
Increase in Loan Interest Rate
6.8%
(Old rate - 3.4%)
Graduate Students
No longer eligible for subsidized loans (Increases
student loan debt approx. $2,000-$4,000 depending on the
length of the program)
Federal Direct Loans (Cont’d)
Loan Origination Fees
Removal of Up-Front Rebates
Student Origination Fee – 1% (Rebate was .5%)
1.05 % Anticipated New Fee Due to Sequestration
PLUS Origination Fee – 4% (Rebate was 1.5%)
4.2 % Anticipated New Fee Percentage Due to Sequestration
(Borrowers were eligible to keep the rebate if they made
their first 12 months of payments on time once they entered
repayment.)
Federal Direct Loans (Cont’d)
150% Limit for Direct Subsidized Loans
MAP – 21; Moving Ahead for Progress in the 21st Century Act
Limits a new borrower’s eligibility for Direct Subsidized Loans
No new subsidized loan for a student after they have
exceeded 150% of the published length of their degree
plan (Same as SAP Requirement)
Proposal: Interest on the subsidized loan will start
accruing once a student has reached 150% limit
Federal Direct Loans (Cont’d)
Grace Period Interest Subsidy Eliminated
Once a student has graduated or is no longer
enrolled at least ½ time, interest will start accruing
on the student loans
(Previously, undergraduate and graduate students were
given a six month grace period before interest started
accruing on their subsidized loans.)
Example: Loan Amount: $5,000
Interest accrued in six months at 6.8%: $170
Federal Direct Loans (Cont’d)
Federal Direct Loan vs. Alternative Loan???
Loan Forgiveness for Qualified Borrowers
Teaching and Other Public Service Loan Forgiveness
Income Based Repayment Plan
Deferment and Forbearance
Loan Discharge Due to Death or Permanent Disability
Fixed Interest Rate
Tax Deductions for Loan Interest to Qualifying
Borrowers
Federal Direct Loans (Cont’d)
(DOE Five Star Training)
Federal Direct Loans (Cont’d)
Default Loan Prevention
An institution's cohort default rate is calculated as
the percentage of borrowers in the cohort who default
before the end of the second fiscal year following the
fiscal year in which the borrowers entered repayment.
This extends the length of time in which a student can
default from two to three years.
Universities are being forced to participate more fully
in the education, notification and collection of
information to prevent defaults.
State of Texas Financial Aid Changes
Priority Deadline
March 15
Tuition and Fee Waivers & Exemptions
(i.e. Hazlewood Legacy & Foster)
SAP Requirements
Restricts Waiver to Undergraduate Students
Restricts Waiver to 8 Semesters
TEXAS Grant
75% Completion Rate of Attempted Hours in
Previous Year
Conclusion
Increased Emphasis on Timely Graduation
SAP, Pell, Direct Loans
Reduction in Federal Aid
Programs
TEACH
Additional Cost to Students
Loan Rebate, No Delay in Interest Accrual
Increased Emphasis on Default Loan Prevention
Income Based Repayment Plans, Loan Forgiveness