ED’s Electronic Announcements (EAs) on IFAP: GENERAL AND VARIED ANNOUNCEMENTS
GENERAL AND VARIED ANNOUNCEMENTS
EA – Posted July 9, 2013 – (General). Volume 8 – The Direct Loan Program [2013 Blue Book]
In this announcement ED has released the last portion of the 2013 Blue Book. This volume consists of a thorough overview of the Direct Loan program. It comprises much of the same information as is in the Federal Student Aid Handbook, but it also includes more comprehensive information that was previously contained in the former publication, The Direct Loan School Guide. As such, it includes chapters on such operational aspects of awards and loan periods, and the Master Promissory Note (MPN), but also there are chapters on reconciliation and borrower care. The Blue Book is somewhat to the Fiscal Office/Bursar’s Office what the Federal Student Aid Handbook is to Financial Aid Administrators. However, because this Volume 8 of the Blue Book is a comprehensive resource on Direct Loans, financial aid administrators will likely find this to be a very useful resource for information related to Direct Loans. Schools will do well to be aware of and utilize this tool.
EA – July 11, 2013 – (COD System). COD Computer-Based Training – 2013 Updates Group 1 [Note: Subsequent Updates to the COD Computer-Based Training – 2013 (Group 2) were provided in the EA posted August 22, 2013.]
ED announces the availability of the updated Common Origination and Disbursement (COD) Computer-Based Training (CBT) and provides a link to the CBT components in these EAs. These CBT components cover a multitude of simulations related to the various functions and activities schools utilize in working with the COD system. In the EAs referenced above, there are a total of 5 COD system and reports CBT simulations that have been updated this year that COD users may find useful as a training tool.
EA – August 9, 2013 – (Loans). Update on Direct Loan Interest Rates Effective July 1, 2013
In this EA, ED makes known the dramatic change in the Direct Loan interest rate structure for loans first disbursed on or after July 1, 2013. This announcement supersedes the July 3, 2013 announcement when ED had indicated that the interest rate for Subsidized DLs would be 6.8% like the then current rate for Unsubsidized DLs. This effective date is retroactive for any loans that may have already been processed for their first disbursement after the July 1 2013 date. It is the first major change in how interest rates are determined since 2007, moving from a fixed rate to a variable fixed rate. This means that each year the interest rate will vary, but once the rate is established for that year the loans will retain that rate throughout repayment. Thus, a student who borrows in multiple years will have fixed rate loans that are all at different rates. Also, the rates for Subsidized and Unsubsidized DLs will be at the same rate (calculated using the same formula) for undergraduates, while DLs for graduate/professional students, and PLUS Loans for graduates and parents will be at different rates. For more information on the new interest rates, see the Legislative Feature Article, “An Artful View of Interest Rate Calculations”, later in this issue of the Inside Report.
EA – August 13, 2013 – (Direct Loans). Update to Direct PLUS Loan Reconsideration Process
ED informs the financial aid community of additional applicants who had not been notified previously of the potential for reconsideration of the initial PLUS Loan denial they received. These individuals are different than those referenced in the first EA on this topic back on April 19, 2013. While ED is clear that they cannot guarantee that these previously denied individuals will be eligible for a PLUS upon reconsideration for approval, ED indicates that its experience with many applicants similar to those in this group that ED is reaching out to were approved for the loan in the subsequent consideration even when nothing in the applicant’s credit report had changed. ED made special communication with the identified applicants inviting them to contact ED’s Student Loan Support Center for reconsideration. Additionally, the individuals are able to be identified by schools on a school’s PLUS Loan Reconsideration Report which is available weekly in their COD Reporting Newsbox. The identified applicants may also be determined by a school via the COD Web site and looking for the Credit Check Reconsideration flag. StudentLoans.gov will also display customized content to those applicants to whom ED has sent the notification for potential reconsideration.
EA – August 30, 2013 – (Loans). 150% Direct Subsidized Loan Limit: Electronic Announcement #3 – Prorating Subsidized Usage Periods Based on Enrollment Status for the 2013-2014 Year
ED provides guidance here on how enrollment statuses are reported and the impact on the 150% Direct Subsidized Loan limit. The NSLDS Enrollment Reporting has never allowed for a reporting of an enrollment status of three-quarter time, but rather only a full-time, half-time, and less than half-time enrollment status for enrolled students. However, in order to appropriately be able to prorate a student’s Subsidized Loan usage, it is necessary to be able to track three-quarter time status as well. Since the NSLDS Enrollment Reporting system is not yet modified to allow for such reporting, an interim alternative method is being utilized in 2013-2014 until ED is able to have the necessary COD and NSLDS enrollment status reporting system changes made. In 2013-2014, all Subsidized Usage Periods where for any portion of a loan’s period the enrollment status is reported to NSLDS as at least half-time, but less than full-time, the Subsidized Usage Period will be prorated on the basis of half-time enrollment, even if the student is actually enrolled three-quarter time. This will calculate to the student’s advantage, thereby not adversely affecting students who may have been enrolled in a status for which ED has not yet allowed an accurate reporting. The system changes in NSLDS and COD to allow for actual reporting of three-quarter time enrollment statuses are planned to be implemented next March.
EA – September 13, 2013 – (General). Introducing Reach FSA – a simplified way for the financial aid community to access Federal Student Aid (FSA) School Contact Centers
ED has implemented a new number for schools (not for students) to use when contacting ED’s various Federal Student Aid (FSA) “School” Contact Centers. The effort, dubbed “Reach FSA”, is a new phone line for the financial aid community that provides the option of calling one number, 1-855-FSA-4-FAA (1-855-372-4322), to reach any of the 10 FSA School Contact Centers, e.g., the Total and Permanent Disability Servicer or the School Eligibility Service Group. When calling to reach one of the contact centers, a caller simply states the name of the contact center being called and the system will direct the caller to that center. It should be noted that schools may continue to call directly the numbers previously used to contact the individual call centers if so desired.
EA – September 19, 2013 – (General). Notice of Establishment of Negotiated Rulemaking Committee
ED announces the establishment of another Negotiated Rulemaking (Neg Reg) committee. This Neg Reg committee’s purpose is to propose recommended regulations to address the changes to the campus safety and security reporting requirements made by the Violence Against Women Reauthorization Act of 2013 (VAWA). The VAWA amended section 485(f) of the Higher Education Act, more commonly known as the Clery Act. The Clery Act contains the requirements for campus safety and security reporting. VAWA expanded the categories of crimes to be reported. The deadline for submission of nominations for the committee is October 21, 2013.