ED’s Dear Colleague Letters (DCLs) on IFAP
(listed by DCL category by date)
DCL – GEN-14-06: April 11, 2014 – Recognized Equivalent of a High School Diploma
With this letter, ED provides important information about changes in what is considered a recognized equivalent of a high school diploma. Effective January 1, 2014, a number of States have either replaced the General Educational Development Certificate (GED) with a different State-authorized examination, or they now offer a choice of several different State-authorized examinations. Two such tests that may be acceptable in some States are the High School Equivalency Test (HiSET) and the Test Assessing Secondary Completion (TASC). A State may have established yet a different official State-authorized examination for determining equivalency of a high school diploma than any of the ones specified here. Schools that have questions about what is acceptable in a particular State should contact that State’s education authority. Contact information for such State education authorities may be found at http://wdcrobcolp01.ed.gov/Programs/EROD/org_list.cfm?category_cd=DAE. Regardless of the authorized examination for a particular State, the student will receive official notification of a passing or failing score, which is then used to establish if the State will issue a high school equivalency certificate to the student. Schools should become familiar with this new information in order to best serve their students.
DCL – GEN-14-10: May 2, 2014 – FY 2015 Sequester Required Changes to the Title IV Student Aid Programs
The continuing effects of the Budget Control Act of 2011 are emphasized and announced in this DCL. Since this law, referred to as the sequester law, is still in effect, further modifications are required in the Title IV programs. Specifically, the programs being addressed in this letter are Direct Loans (DL), Iraq and Afghanistan Service Grants (IASG), and TEACH Grants. The DL programs are seeing an increase in the loan origination fees again. The increase is effective for loans first disbursed on or after October 1, 2014 (which is the beginning of the new Federal fiscal year), but before October 1, 2015. The increase is moving up by 1/1000 of a percent to 1.073 percent. As an example the origination fee on a $5500 DL will be $59.01. That is 5 cents more in origination fee for a $5500 loan than if the same loan amount was first disbursed before October 1, 2014. An important reminder that ED provides schools is that for any loan fee calculation that results in more than two decimal points, the result must be truncated beyond the second decimal place, and not rounded.
For the calculation of IASG awards to be first disbursed on or after October 1, 2014, but before October 1, 2015, the amount must be reduced by 7.3% from the award amount that would have otherwise been calculated based upon the maximum Scheduled Pell Grant award for the applicable award year. In comparison, the sequester required for IASG awards made between October 1, 2013, but before October 1, 2014 was 7.2%. As a result, for 2014-2015 awards, if a student is first disbursed IASG before October 1, 2014, the award will be $5.73 more than if it is first disbursed after October 1, 2014.
TEACH Grant awards are being reduced by 7.3% from what they would have otherwise have been for all awards first disbursed on or after October 1, 2014. That compares with a 0.89% reduction required for TEACH Grants first disbursed on or after October 1, 2013, but before October 1, 2014. As a result, a student awarded a TEACH Grant for 2014-2015 will receive $256.60 more if the grant is first disbursed before October 1, 2014 than if it is first disbursed on or after October 1, 2014, but before October 1, 2015.
The DCL includes a chart showing the various percentage reductions and effects upon award amounts. Schools may find this useful in understanding the impact of sequestration.