2013-2014 Federal Updates
Federal Direct Loans
- The origination fees for direct subsidized loans and direct unsubsidized loans will increase to 1.05% and for direct PLUS loans (both parent and graduate) will increase to 4.20% for any loan where the first disbursement will be made on or after July 1, 2013.
- Due to the inability for the House and Senate to reach an agreement by July 1st, the interest rates for direct subsidized loans will double to 6.8% for any loan where the first disbursement will be made on or after July 1, 2013. It is possible that the government will reach a decision to reduce this interest rate at a later time and apply it retroactively to July 1.
- Certain direct PLUS loan borrowers may be eligible to have their denied credit check reconsidered. Both the school and these borrowers have been notified by COD of this and if the borrower decides to take advantage of it their PLUS loan decision will be updated to Accepted.
- First-time borrowers who receive a federal direct Stafford loan on or after July 1, 2013 will be subject to the 150% limit. This means that eligibility for direct subsidized loans have been limited to a period not to exceed 150% of the length of the borrower’s educational program. Under certain conditions, first-time borrowers who have exceeded the 150% limit may lose the interest subsidy on their direct Stafford loans. The Department of Education will be responsible for calculating a first-time borrower’s maximum eligibility period and subsidized usage periods, as well as determining whether a first-time borrower has any remaining eligibility period or will lose interest subsidy on the direct subsidized loans as a result of the 150% limit. Beginning immediately, the school is responsible for correctly reporting the direct loan academic year and loan period dates to COD, as well as providing entrance counseling to students for these new requirements. Beginning with the 2014-2015 direct loan processing year, the school will be responsible for reporting any additional program-identifying information and borrower enrollment information.
- New entrance counseling materials have been added to studentloans.gov for first-time borrowers that address the 150% limit. Schools are encouraged to provide this information to students who have already completed entrance counseling. Cal U students can refer to the Types of Aid, Loan section for additional information.
Federal Pell Grant
- The Maximum amount of the Federal Pell Grant will increase from $5,550 to $5,645.
- The Minimum amount of the Federal Pell Grant will increase from $602 to $605.
- The estimated family contribution (EFC) in which to receive a Federal Pell Grant has changed from a maximum EFC of 4,996 to 5,081.
- Students are prohibited from receiving Pell grants from two different award years at the same time.
- Students, who have attended and received a Pell grant at three or more schools, will need to sign an Identity and Educational Purpose Statement and provide the Financial Aid Office with copies of their transcripts (can be official or unofficial) from each college attended. This must be complete before any financial aid can be awarded.
Now mandated by federal regulation without exception, students selected for Verification who have not used the IRS Data Retrieval when completing their FAFSA will be required to submit to the Financial Aid Office a Tax Return Transcript from the IRS. The Financial Aid Office can no longer accept copies of the Federal Tax Return (1040, 1040A, 1040EZ, Etc.)