Overview of 150% Direct Subsidized Loan Limit

1. Session GS4 Overview of 150% Direct Subsidized Loan Limit Nathan Arnold & Ian Foss | Dec. 2014 U.S. Department of Education 2014 FSA Training Conference for Financial Aid Professionals

2. First-time borrower and consequences

3. First-Time Borrower • Applies only to first-time borrowers as of July 1, 2013: • Student who has no outstanding balance on a FFEL or Direct Loan when receiving a Direct Loan on or after July 1, 2013. Example A Example B

4. Consequence: Eligibility Loss • Borrower loses eligibility for additional Direct Subsidized Loans when borrower has received Direct Subsidized Loans for 150% of their current academic program. • If eligibility is lost, borrower still eligible for Direct Unsubsidized Loans. Generally measured in time, not dollars.

5. Consequence: Interest Subsidy Loss Based on enrollment, not borrowing, or requesting aid.

6. Loss of eligibility

7. Determining When Eligibility is Lost 150% limit is met and further eligibility is lost when Remaining Eligibility Period is zero (or less).

8. Maximum Eligibility Period 150% limit is met (eligibility is lost) when remaining eligibility period is zero (or less).

9. Maximum Eligibility Period • Maximum eligibility period is 150% of the published length of borrower’s current or upcoming academic program • Varies by program • Multiply published length of program by 1.5 • Two exceptions • Measured in academic years or portions • ED will calculate using school-reported information

10. Converting Months/Weeks To Years

11. Exception 1: Bachelor’s Completion • Bachelor’s degree-completion programs will have a Maximum Eligibility Period of six years • Definition: • Only admits students who have completed • Associate degree or • Two years of prior undergraduate coursework

12. Exception 2: Special Admission • Special admission associate degree programs will have a Maximum Eligibility Period of six years • Definition: • Only admits students who have completed • Associate degree or • Two years of prior undergraduate coursework • Admits students on a competitive basis (i.e., no open enrollment) • Prepares students for occupation requiring licensure from state • Example: Nursing program

13. Subsidized Usage Period 150% limit is met (eligibility is lost) when remaining eligibility period is zero (or less).

14. Subsidized Usage Period • A Subsidized Usage Period is the period of time for which a borrower receives a Direct Subsidized Loan • Calculated loan-by-loan • Measured in academic years or portions • Rounded up/down to nearest tenth of a year • Includes only periods when Direct Subsidized Loan received • ED will calculate using school-reported information • Two exceptions

15. Calculating Subsidized Usage Period

16. Exception 1: Enrollment Status • Calculated subsidized usage period is prorated by enrollment status • Proration occurs before rounding

17. Exception 2: Annual Loan Limit • Only circumstance where dollars are considered is when a student receives a Direct Subsidized Loan in the amount of the annual loan limit • Can only occur for standard-term programs or for non-standard-term SE9W programs

18. Determining When Limit Is Met 150% limit is met and further eligibility is lost when Remaining Eligibility Period is zero (or less).

19. Remaining Eligibility Period • How much eligibility a borrower has left under the 150% limit • Accounts for Direct Subsidized Loans received for all enrollment in all programs (except teacher certification programs) • Eligibility lost when remaining eligibility is zero or less • ED will calculate using school-reported information

20. Loss of interest subsidy

21. Loss of Interest Subsidy Subsidy loss is effective on the date of the triggering enrollment.

22. Enrollment Types & Subsidy Loss

23. Periods of Interest Subsidy Borrower with interest subsidy: Borrower who lost interest subsidy:

24. Which interest is the borrower’s? Subsidy loss is not retroactive to the date of disbursement or from the date of the loss of eligibility. Loss of subsidy is from the date of the enrollment that caused the loss of subsidy.

25. Example 1 Student received 6 years of Subsidized Loans while enrolled in a 4-year BA program. Student does not complete at the end of the 6th year, and enrolls for a 7th year.

26. Example 2 Student received 3 years of Subsidized Loans in a 2-year program. After completing 3rd year but not completing the program, student transfers into a 4-year program.

27. Example 3 Student is enrolled in a 2-year program and received 3 years of Subsidized Loans for enrollment in that program. Student enrolls for one more semester in the 2-year program, and then transfers to a 4-year program. • Student regains eligibility for Subsidized Loans upon transfer. • Any new Subsidized Loans will have interest subsidy. • Prior Subsidized Loans that lost subsidy do not regain subsidy.

28. Example 4 Student received 5 years of Subsidized Loans while enrolled in a 4-year BA program. The student completes the program and then enrolls in a 2-year AA program.

29. Example 5 Student received 5 full years of Direct Subsidized Loans while enrolled in a 4-year BA program. The student does not complete the program and then enrolls in a 2-year AA program.

30. Special provisions 30

31. Preparatory Coursework

32. Teacher Certification Programs Programs that do not lead to a degree/certificate at institution, but lead to State credential that is required for teaching Not only does the "clock restart", but the borrower cannot lose interest subsidy by enrolling in teacher certification program

33. Loan Period & Academic Year 33

34. Basics

35. Example 6 Student at SAY (fall/spring) is graduating at end of fall term.

36. Example 7 Student starts at BBAY 1 school in spring term. SAY is fall/spring.

37. Example 8 Student starts at BBAY 3 school at 30 clock-hours/week. Title IV AY is 900 clock-hours and 28 weeks. Program is 540 clock-hours and 18 weeks.

38. Minimum Loan Periods • For credit-hour, standard-term or non-standard term SE9W programs, minimum loan period is the term • For clock-hour, non-term or non-standard term NSE9W programs, minimum loan period is the lesser of: • The length of the program • The remaining portion of the program • The academic year

39. Overlapping Academic Years • If student transfers into your school and an academic year reported by prior school has not elapsed: • For credit-hour programs using standard terms or non-standard terms but that are SE9W, report your own academic year and ignore prior school’s • For non-term or clock-hour programs, use prior school’s academic year dates

40. Example 9 Student attended School A and received $1,750 in subsidized loans as a first-year student (the loan was originally fall/spring for $3,500, but the student withdrew and School A modified the existing loan). School A uses SAY to track annual loan limits and defines its SAY as fall and spring. Student transfers to School B for spring, which uses BBAY 1 to track annual loan limits. Student can only receive remaining $1,750 until SAY from prior school ends. After SAY from prior school ends, student can receive another $1,750 before the end of the BBAY. Though the $1,750 from School A not longer counts, the first $1,750 from School B counts.

41. Example 10 Student attended School A and received $1,750 in subsidized loans as a first-year student. Student transfers to School B to start a 1-year clock-hour program. Student can only receive remaining $1,750 until SAY from prior school ends. After SAY from prior school ends, student progresses to next annual loan limit.

42. Reporting COD & NSLDS 42

43. New Reporting Requirements • Schools are required to report information about a student’s program of study to COD & NSLDS. • In COD, new tags are mixed between “award-level” and “disbursement-level” tags. • These are required tags for 2014-2015 loans and forward. • In NSLDS, program-level reporting is a new record type altogether. • These are required fields for any roster generated on/after October 1, 2014. • Program-level enrollment is required retroactive to July 1, 2014 • Schools must report the most recent enrollment status for any student who is or was enrolled in program on/after July 1, 2014

44. New Data Elements

45. What is a program? A program is defined as the unique combination of: To the extent that a student is enrolled in coursework that is associated to multiple CIP Codes, credential levels, or program lengths, the student is in multiple programs. See DCL GEN-14-17.

46. NSLDS – Who Must You Report • Students who appear on your roster • NSLDS will place students on your roster if: • You award/disburse aid to the student at your school • You add the student to transfer student monitoring • You certify an in-school deferment form for a student

47. Which programs to report? Program Indicator • Coursework that does not lead to a degree or certificate at the school is not a program and should not be reported unless it is: • Preparatory coursework, • teacher certification coursework, or • Part of a 2+2 transfer program at a community college

48. Program Length In COD, you can only send one tag. Pick one unit to report program length in.

49. Program Length

50. CIP Codes You must report valid CIP Codes. Decimal is express in COD; implied in NSLDS.