MASFAA 2014
150% Loan Limits
05/15/2014
150% Limit on
Direct Loan
Interest Subsidy
MASFAA 2014 Annual Conference
Natchez, Mississippi
Rick Renshaw, FSA Training Officer| 05.15.2014
Subsidized Loan Limit
 Statute: On July 6, 2012, the Moving
Ahead for Progress in the 21st Century
Act (MAP-21) was enacted (P.L. 112-141)
 Regulations:
 Interim Final Regulations published on
May 16, 2013
 Revised Final Regulations published
on January 16, 2014
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MASFAA 2014
150% Loan Limits
05/15/2014
Final Regulations
 Regulations
effective immediately upon
publication
 Revises
34 CFR 685.200, 685.202, and 685.304
 Additional
guidance can be found on IFAP
through the 150% Direct Subsidized Loan Limit
Information Page
 http://www.ifap.ed.gov/150PercentDirectSubsidized
LoanLimitInfo/index.html
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First-Time Borrower
Applies only to first-time borrowers as of July 1,
2013: Students who have no outstanding balance on
a FFEL or Direct Loan when receiving a Direct Loan
on or after July 1, 2013.
Example A
Student has
never
borrowed
before
Student
enrolls in
August 2013
Student
receives a
Direct Loan
Student is a
first-time
borrower
Example B
Student
received FFEL
and Direct
Loans prior to
July 1, 2013
Student pays
off all FFEL
and Direct
Loans in 2015
Student enrolls
in 2017
Student
receives a new
Direct Loan in
2017
Student is a
first-time
borrower
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Consequence: Eligibility Loss
Borrower loses eligibility for additional Subsidized
Direct Loans when borrower has received
Subsidized Direct Loans for 150% of their current
academic program.
Generally measured in
time, not dollars.
If eligibility is lost, borrower still eligible for
Unsubsidized Direct Loans.
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MASFAA 2014
150% Loan Limits
05/15/2014
Consequence: Interest Subsidy Loss
Lost eligibility
due to 150%
limit
Did not
complete
program
Enrolls in
program of
equal or
shorter length
Subsidy loss
Based on enrollment,
not borrowing, or requesting aid.
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Components

Maximum Eligibility Period - 150% of the published
length of the educational program in which
borrower is currently enrolled
 Subsidized Usage Period – Period of time for
which a borrower received a Direct Subsidized
Loan (permanent)
 Remaining Eligibility Period – Difference between
the Maximum Eligibility Period and the total of all
Subsidized Usage Periods
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Determining When Eligibility is Lost
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
Remaining
Eligibility
Period
150% limit is met and further
eligibility is lost when Remaining
Eligibility Period is zero (or less).
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MASFAA 2014
150% Loan Limits
05/15/2014
Maximum Eligibility
Period
Maximum Eligibility Period

Maximum eligibility period is 150% of the
published length of educational program in which
borrower is currently enrolled
 Each
academic program has a maximum eligibility
period that is based on the published length of the
program
 May be reported in years, months, or weeks
 Take
published length of program in academic
years and multiply by 1.5
 COD will determine based on school-provided
information
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Converting Months or Weeks To Years

If the published length of the program is measured
in months or weeks, ED will convert the school
reported months or weeks to years (or portions of
years) –
Number of days in the months or weeks
Number of days in the Title IV academic year
 Month
 Week
= 30 days
= 7 days
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MASFAA 2014
150% Loan Limits
05/15/2014
Maximum Eligibility Period Examples
Program Length
4-Year Bachelor’s
Degree
2-Year Associate’s
Degree
1-Year Certificate
Program
18-Week Certificate
Program
X 1.5
Maximum
Eligibility Period
6.00 Years
X 1.5
3.00 Years
X 1.5
1.50 Years
X 1.5
27 Weeks
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Converting Months or Weeks To Years

Months Example –
 Credit hour school defines its Title IV Academic Year
as 30 weeks: 210 days
 Program A’s published length is 7 months: 210 days
 210 days divided by 210 days = 1.00 years
 Program B’s published length is 15 months: 450 days
 450 days divided by 210 days = 2.14 years
 Program C’s published length is 12 months: 360 days
 360 days divided by 210 days = 1.71 years
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Converting Months or Weeks To Years

Weeks Example –
 Clock hour school defines its Title IV Academic Year
as 26 weeks: 182 days
 Program A’s published length is 18 weeks: 126 days
 126 days divided by 182 days = 0.69 years
 Program B’s published length is 35 weeks: 245 days
 245 days divided by 182 days = 1.35 years
 Program C’s published length is 48 weeks: 336 days
 336 days divided by 182 days = 1.85 years
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MASFAA 2014
150% Loan Limits
05/15/2014
Subsidized Usage
Period
Subsidized Usage Period

Subsidized Usage Period – The period of time for
which a borrower receives a Direct Subsidized Loan
 Calculated on loan-by-loan basis
 Measured in academic years and rounded to the
nearest tenth of a year
 Includes only periods when Direct Subsidized
Loan was received
 ED will calculate based on school-provided
information
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Loan Period & Academic Year
•
Determine the Subsidized Usage Period
• Covered in DCL GEN-13-13, applies to all
Direct Loans
• Loan Period – period of enrollment for
which borrower received loan
• Must be updated if student’s actual
enrollment or eligibility doesn’t match
originally reported loan period
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MASFAA 2014
150% Loan Limits
05/15/2014
Loan Period & Academic Year
•
Academic year – period to which the annual loan
limit applies
• For credit-hour programs that use standard terms
or non-standard SE9W terms, corresponds to
calendar period of terms in SAY or BBAY
• For clock-hour programs or credit-hour programs
that use non-standard NSE9W terms or do not use
terms, corresponds to period of time required for
borrower to complete a Title IV academic year’s
worth of coursework (BBAY)
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Updating 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 payment period are
returned (R2T4)
• Student cancels all of a disbursement of a loan that
is attributable to a payment period
• Student is not otherwise eligible for a loan for a
payment period covered by the loan period
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Updating Loan Periods - Continued
•
The student (in clock-hour programs, nonterm programs, and non-standard term
NSE9W programs) is not progressing to
the next payment period as scheduled
•
This is a non-exhaustive list
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MASFAA 2014
150% Loan Limits
05/15/2014
Updating 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
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Calculating Subsidized Usage Period

Number of days in the loan’s loan period divided by
number of days in the loan’s academic Year
 Loan period – Beginning and ending dates of
period covered by loan
 Academic year – Beginning and ending dates of
the academic year used for annual loan limit
progression
 Either a Scheduled Academic Year (SAY) or a
Borrower Based Academic Year (BBAY)
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Example 1: Usage
Program is semester-based. Scheduled academic
year includes the fall and spring semesters.
Student receives loan for fall and spring semesters.
Begin Date
End Date
Number of
Days
Loan Period
August 27, 2013
May 17, 2013
264
Academic Year
August 27, 2013
May 17, 2014
264
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MASFAA 2014
150% Loan Limits
05/15/2014
Example 2: Usage
Program is semester-based. Scheduled academic
year includes the fall and spring semesters.
Student receives loan for fall semester only.
Begin Date
End Date
Number of
Days
Loan Period
August 27, 2013
December 21, 2013
117
Academic Year
August 27, 2013
May 17, 2014
264
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Enrollment Status Exception
Full-time =
Calculated
1.00
subsidized usage
period is prorated
¾-time = 0.75
by enrollment
status
½-time = 0.50
 Proration occurs
before rounding

150% Direct Subsidized
Loan Limit Electronic
Announcement #8
Prorate Subsidized Usage
Period based on enrollment
status.
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Example 3: Enrollment Status Exception
Program is semester-based. Scheduled academic year
includes the fall and spring semesters. Student receives
loan for both semesters while enrolled half-time for both
semesters.
Begin Date
End Date
Number of Days
Loan Period
August 27, 2013
May 17, 2014
264
Academic Year
August 27, 2013
May 17, 2014
264
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MASFAA 2014
150% Loan Limits
05/15/2014
Annual Loan Limit Exception
Only circumstance where dollars are considered is
when a student receives a Direct Subsidized Loan
in the amount of the annual loan limit.
Borrow full
annual
loan limit
Received
for less
than 1 AY
Subsidized
Usage
Period = 1
Can only occur for standard-term programs or for
non-standard-term programs that are substantially
equal and are each at least nine weeks in length.
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Example 4: Annual Loan Limit Exception
Program is semester-based. Scheduled academic
year includes the fall and spring semesters. Third
year student receives loan of $5,500 for fall
semester only.
Begin Date
End Date
Loan Period
August 27,
2013
December 21, 2013
Number of Days
117
Academic Year
August 27,
2013
May 17, 2014
264
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Remaining
Eligibility
Period
10
MASFAA 2014
150% Loan Limits
05/15/2014
Determining When Limit Is Met
All
Subsidized
Usage
Periods
Maximum
Eligibility
Period
Remaining
Eligibility
Period
150% limit is met and further
eligibility is lost when Remaining
Eligibility Period is zero (or less).
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Example 1: Remaining Eligibility
Student receives 5 full years of Direct Subsidized
Loans while enrolled in a 4-year BA program.
All
Subsidized
Usage
Periods
Maximum
Eligibility
Period
Remaining
Eligibility
Period
Maximum Eligibility Period
6 Years
All Subsidized Usage Periods
5 Years
Remaining Eligibility Period
1 Year
32
Example 2: Remaining Eligibility
Student receives 3 years of Direct Subsidized Loans
while enrolled in a 2-year program. Student then
transfers to a 4-year program.
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
Remaining
Eligibility
Period
After year 3 of Upon transfer to
2-year program 4-year program
Maximum Eligibility Period
3 Years
All Subsidized Usage Periods
3 Years
6 Years
3 Years
Remaining Eligibility Period
0 Years
3 Years
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MASFAA 2014
150% Loan Limits
05/15/2014
Example 3: Remaining Eligibility
Student receives 1 year of Direct Subsidized
Loans while enrolled in a 2-year program. Student
transfers to a 1-year clock-hour program.
All
Subsidized
Usage
Periods
Maximum
Eligibility
Period
Remaining
Eligibility
Period
After year 1 of 2year program
Upon transfer to 1year cert. program
Maximum Eligibility Period
3 Years
1.5 Years
All Subsidized Usage Periods
1 Year
1 Year
Remaining Eligibility Period
2 Years
0.5 Years
Minimum loan period length in a clock-hour program is lesser of length of program or
academic year. School cannot disburse a Direct Subsidized Loan to this student.
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Loss of Interest
Subsidy
Benefits
Loss of Interest Subsidy Benefits
No
Remaining
Eligibility
Period
No
Completion
Enroll
Subsidy
loss
Subsidy loss is effective on the date of the triggering
enrollment.
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MASFAA 2014
150% Loan Limits
05/15/2014
Enrollment Types: Subsidy Loss
1
2
3
Student lost
eligibility
Student lost
eligibility
Student had
remaining
eligibility
Enrolled at least ½
time in same
undergraduate
program
Enrolled at least ½
time in an
undergraduate
program of equal
or lesser length
Student enrolled at
least ½ time in
shorter
undergraduate
program where
usage ≥ maximum
37
Enrollment Types: No Subsidy Loss
•
Enrollment in a graduate or professional
program
• Enrollment in preparatory coursework
necessary for enrollment in a graduate or
professional program
• Enrollment in a teacher certification
program where school does not award an
academic credential
38
Periods of Interest Subsidy
Borrower with interest subsidy:
In-school
Grace
Repay Std.
Defer.
Forbear.
Repay IBR/PAYE*
Borrower who lost interest subsidy:
In-school
Grace
Repay. –
Std.
Defer.
Forbear.
Repay –
IBR/PAYE
Subsidized Period
Unsubsidized Period
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MASFAA 2014
150% Loan Limits
05/15/2014
Subsidized
Interest
accrued
before
subsidy loss
Borrower’s responsibility
ED’s responsibility
Which interest is the borrower’s?
Interest
accrued after
subsidy loss
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.
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Example 1: Subsidy Loss
Student received 6 years of Subsidized Loans while
enrolled in a 4-year program. Student does not
complete and enrolls for a 7th year.
No Remaining
Eligibility Period
No Completion
Enrolls
Subsidy Loss
Maximum Eligibility Period
6 Years
All Subsidized Usage Periods
6 Years
Remaining Eligibility Period
0 Years
Subsidy Loss
Yes, enrolled with no remaining
eligibility and without completing
41
Example 2: Subsidy Loss
Student is enrolled in a 2-year program and received 3
years of Subsidized Loans. Student enrolls for one more
semester in the same program, and then transfers to a
4-year program.
Before transfer
Upon transfer
Maximum Eligibility Period
3 Years
6 Years
All Subsidized Usage Periods
3 Years
3 Years
Remaining Eligibility Period
0 Years
3 Years
Subsidy Loss
Yes, borrower enrolled
after eligibility loss.
No, borrower enrolled in
a longer program.
Student regains eligibility to borrow Subsidized Loans upon transfer.
Any new Subsidized Loans will have interest subsidy.
Prior Subsidized Loans that lost subsidy do not regain subsidy.
•
•
•
42
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MASFAA 2014
150% Loan Limits
05/15/2014
Example 3: Subsidy Loss
Student received 5 years of Subsidized Loans while
enrolled in a 4-year program. Student completes the
program and then enrolls in a 2-year program.
No Remaining
Eligibility Period
No Completion
Enrolls
Subsidy Loss
End of year 5
Upon transfer
Maximum Eligibility Period
6 Years
3 Years
All Subsidized Usage Periods
5 Years
5 Years
Remaining Eligibility Period
1 Year
-2 Years
Subsidy Loss
No, borrower has
remaining eligibility.
No, borrower graduated
from prior program.
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Example 4: Subsidy Loss
Student received 5 full years of Direct Subsidized
Loans while enrolled in a 4-year program. Student
does not complete and then enrolls in a 2-year
program.
No Remaining
Eligibility Period
No Completion
Enrolls
Subsidy Loss
End of year 5
Upon transfer
Maximum Eligibility Period
6 Years
3 Years
All Subsidized Usage Periods
5 Years
5 Years
Remaining Eligibility Period
1 Year
-2 Years
Subsidy Loss
No, borrower has
remaining eligibility.
Yes, transfer caused
borrower to exceed max.
44
Special
Provisions
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MASFAA 2014
150% Loan Limits
05/15/2014
Preparatory Coursework
For Enrollment in an
Undergraduate
Program
For Enrollment in a
Grad/Professional
Program
Maximum Eligibility Period is
150% of program for which
coursework is preparing.
Maximum Eligibility Period is
150% of program for which
borrower most recently received
Direct Subsidized Loan.
Subsidized Usage Periods count
against maximum eligibility.
Subsidized Usage Periods count
against maximum eligibility.
Enrolling could result in loss of
interest subsidy.
NOT possible to lose interest
subsidy by enrolling.
46
Non-Credential Teacher Certification
•
Student enrolled in teacher certification
coursework that does not lead to a
credential offered by the school is eligible
for Direct Loans
Coursework must be required for certification by
the state to teach elementary/secondary school
• Student may receive up to an annual loan limit
of $5,500 in Subsidized DL for teacher
certificate coursework
•
47
Non-Credential Teacher Certification
•
•
•
•
Maximum eligibility period limited to 150% of
published length of the teacher certification program
Only subsidized loans received for teacher certification
coursework are in included in the borrower’s subsidized
usage period
Enrollment in teacher certification coursework counts
only against the maximum eligibility period for the
borrower’s teacher certification coursework
Enrollment in teacher certification coursework does not
cause a borrower to become responsible for accruing
interest on any subsidized loans
48
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MASFAA 2014
150% Loan Limits
05/15/2014
Teacher Certification in 2013-2014
•
•
•
•
•
No way COD can assume enrollment in Teacher
Certification Program
Schools must provide ad-hoc reporting to COD
starting in February 2014
Number of impacted schools and borrowers is
limited
150% EA #4 – 10/25/2013
150% EA #10 – 02/28/2014
49
Short-Term Programs in 2013-14
•
•
•
•
•
•
First-time borrowers are always eligible to receive
their first Subsidized Loan under the 150% limit
Most borrowers will not receive a second loan before
schools begin using 2014-2015 COD that will track
the 150% limit for schools
Possible for students in short-term programs to have
150% eligibility limitation
School must make own determination – can use ED
developed spreadsheet
150% EA #5 – 11/12/2013
150% EA #11 – 3/10/2014
50
Loan
Counseling
17
MASFAA 2014
150% Loan Limits
05/15/2014
Entrance Counseling Resources
StudentLoans.gov:
June 28, 2013 – contains a
link to PDF of counseling
information (entrance only)
StudentLoans.gov:
December 2013 –
integrated information into
counseling flow (entrance
and exit)
150% EA #1:
May 16, 2013 – contains
PDF of counseling
information that is on
StudentLoans.gov (may be
used for entrance and exit)
Resources/References
•
An IFAP webpage similar to GE webpage has
been created containing:
–
–
–
–
Training materials
DCLs, EAs and policy guidance
Q & As
Email address for questions
•
FSATC Sessions #28, also #12 and #15
•
Recorded 150% Loan Limit Webinars #1, #2, and #3
53
QUESTIONS?
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MASFAA 2014
150% Loan Limits
05/15/2014
My Contact Information
Rick Renshaw
Training Officer
U.S. Dept. of ED
Federal Student Aid
Dallas Regional Office
214.661.9506
[email protected]
55
Help with Title IV Questions
For Schools & Other Professionals
•
•
•
•
Research and Customer Care Center (RCCC)
1-800-433-7327
[email protected]
For Students
•
•
•
Federal Student Aid Information Center (FSAIC)
1-800-4FED-AID
56
My Supervisor Requests Your Feedback






Mark Gerhard
Supervisor of Training Officers
U.S. Dept. of ED/Federal Student Aid
415.486.5620
[email protected]
Please use this link to complete your
evaluation:
https://s.zoomerang.com/s/RickRenshaw
Session Name: MASFAA 2014 150% Sub Loan Limits
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