AACS Financial Aid Workshop
May 2015
Pell Grant and Direct Loan
Administration in Clock Hours
Present by: Bruce Honer
U.S. Department of Education
Pell Grants
Clock Hours
Academic Year
3
Bruce Honer
U.S. Department of Education
1
AACS Financial Aid Workshop
May 2015
Academic Year
•
Must be defined for each eligible program
•
•
•
May be the same for all programs
May be different for some or all programs
Must contain at least 900 clock hours and 26 weeks of
instructional time (clock-hour program)
4
Academic Year Minimums
Statutory Definition of an Academic Year
Academic Progress
Measured By:
Minimum Completion Minimum Instructional
Requirement*
Time Requirement **
Semester hours
24 semester hours
30 weeks
Trimester hours
24 trimester hours
30 weeks
Quarter hours
36 quarter hours
30 weeks
Clock hours
900 clock hours
26 weeks
30‐week minimum for
Credit hour
programs *Number of hours that a student enrolled full time is expected to complete in a full
academic year.
.
**A week is a 7-day period in which there is at least 1 day of instruction or exams.
Minimum measure
can be more!
5
Defining the Academic Year
Full-time for an undergraduate clock-hour program must
be at least 24 clock hours a week
• Half-time must be at least 12 clock hours per week
(needed for loan eligibility)
• Reminder: weekly attendance schedule impacts
academic year definition
•
•
•
•
A student attending 24 hours per week will complete 900 hours in
37.5 weeks
A student attending 30 hours per week will complete 900 hours in
30 weeks
A student attending 35 hours per week will complete 900 hours in
26 weeks
6
Bruce Honer
U.S. Department of Education
2
AACS Financial Aid Workshop
May 2015
Defining the Academic Year
•
A program may be shorter than, equal to, or longer than
the defined academic year
•
•
600-, 900-, and 1300-hour programs could all have an academic
year of 900 clock hours/30 weeks, or
A 1050 clock-hour/35-week program could have an AY definition
equal to the program
•
•
Receive one annual Pell and one annual loan for program
The academic year determines the period of time for
which Title IV aid will be awarded and disbursed
7
Your School’s Academic Year
Is the Academic Year defined in
your P&P manual?
• You’ll need to revisit the definition
so your clock-hour programs have
the required components
•
8
Payment Periods
9
Bruce Honer
U.S. Department of Education
3
AACS Financial Aid Workshop
May 2015
Defining Payment Periods
Based on the academic year definition of the program
and the defined length of the program, in clock hours and
weeks of instructional time
• Rules for
•
•
•
Programs equal to or shorter than an academic year, in either
clock hours or weeks
Programs longer than an academic year
10
Defining Payment Periods
•
Programs equal to or shorter than an academic year
•
•
•
Divide the program/academic year in half
First payment period equals half the clock hours and half the weeks
Second payment period equals the other half of the clock hours and
weeks
Example1: Program of 900 clock hours and 30 weeks will have two payment
periods of 450 clock hours and 15 weeks
• Example 2: Program of 750 clock hours and 24 weeks will have two payment
periods of 375 clock hours and 12 weeks
•
11
Defining Payment Periods
•
Programs longer than an academic year with remaining
period equal to or less than half an academic year
Use rule for one academic year for each full academic year in the
program
• Final portion is one payment period with remaining clock hours and
weeks
Program: 1230 clock hours/41 weeks; AY 900 hours/30 weeks (attend 30 hrs. wk.)
•
PP1: 450 clock hrs/15 wks PP2: 450 clock hrs/15 wks PP3: 330 clock hrs/11 wks Program: 1050 clock hours/42 weeks; AY 900 hours/36 weeks (attend 25 hrs. wk.)
PP1: 450 clock hrs/18 wks PP2: 450 clock hrs/18 wks PP3: 150 clock hrs/6 wks 12
Bruce Honer
U.S. Department of Education
4
AACS Financial Aid Workshop
May 2015
Defining Payment Periods
•
Programs longer than an academic year with remaining
period greater than half an academic year
Use the rule for one academic year for each full academic year in
the program
• Remaining portion is divided into two equal payment periods, each
with half the remaining hours/weeks
Program: 1600 clock hours/46 weeks; AY 900 hours/26 weeks (attend 35 hr. wk.)
PP1: 450 clock PP2: 450 clock PP3: 350 clock PP4: 350 clock hrs/13 wks hrs/13 wks hrs/10 wks hrs/10 wks •
Program: 1440 clock hours/54 weeks; AY 900 hours/34 weeks (attend 27 hrs. wk.)
PP1: 450 clock hrs/17 wks PP2: 450 clock PP3: 270 clock PP4: 270 clock hrs/10 wks hrs/10 wks hrs/17 wks 13
Defining Payment Periods
Schools cannot create more payment periods for a
program than what is specified in the regulations
• These rules for defining lengths of payment periods
do not change based on conditions such as
•
•
•
Student progress through the program
The award year in which the payment period falls
14
Defining Payment Periods
•
A payment period ends only when an individual
student successfully completes the clock hours
AND the weeks in the payment period
– “Successfully completes” means the student has
attended and passed the coursework associated with
the clock hours/weeks in the payment period
– Students may complete payment periods at different
times, for instance, due to absences or failing
coursework
15
Bruce Honer
U.S. Department of Education
5
AACS Financial Aid Workshop
May 2015
Defining Payment Periods
•
If programs have individual courses within a payment
period and a student fails a course, the student will take
longer to complete the payment period
Scheduled to complete payment period
Actually completes payment period
450 clock hours and 15 weeks of instruction
150‐hr. course 150‐hr. course 150‐hr. course 150‐hr. course
Repeats failed Fails the Successfully Successfully course; fails to course and completes the completes the successfully passes or passes course
course
a different course complete of 150 hrs.
150 hrs.
16
Excused Absences 34 CFR 68.164(b)(3)
Optional
Separate from attendance and SAP policies
• Written policy permitting excused absences
• An absence that a student does not have to make up
• Excused absences cannot exceed the lesser of
•
•
•
•
•
•
Accrediting agency policy on excused absences
State licensing agency policy on excused absences OR
10% of the clock hours in a payment period
Example
•
45 hours in a 450 clock-hour payment period can be counted as
excused absences (count as completed hours)
17
Crossover Payment Periods
Defined as any payment period that begins prior
to July 1 and ends on/after July 1
• Process for defining length of payment periods
DOES NOT CHANGE if the program or payment
period crosses over award years
• Number and length of payment periods as
originally determined remain the same even when
payment periods fall into different award years
•
18
Bruce Honer
U.S. Department of Education
6
AACS Financial Aid Workshop
May 2015
Crossover Payment Periods
1200 Clock‐Hour/32‐Week Program
900 Clock‐Hour/26‐Week A/Y
450 hrs/13 wks
2013‐14 award year
450 hrs/13 wks
300 hrs/6 wks
2014‐15 award year
July 1
March 2013
Payment period that crosses over still retains the original length
19
Payment Period Disbursements
As with term-based programs,
may make the first disbursement
up to 10 days prior to the first
day of the first payment period
• Subsequent disbursements
cannot be made until the student
successfully completes the clock
hours and the weeks in the
previous payment period
•
20
Payment Period Disbursements
•
•
Disbursements made by clock-hour payment period
Cannot choose to have more payment periods than those
defined in regulation
•
•
Can make multiple installments of a disbursement within a payment
period to best meet needs of the student; however, does not create
more payment periods, nor does it change amount student is eligible to
receive for the payment period
Cannot delay making disbursement until the student has
completed at least 60% of the payment period in order to
avoid having to return funds from an R2T4 calculation
21
Bruce Honer
U.S. Department of Education
7
AACS Financial Aid Workshop
May 2015
Pell Grant Calculations
22
Pell Ground Rules
•
Fractions
•
•
•
•
•
•
•
•
Multiply first, then divide
Rounding
COD accepts cents and whole dollars (for Pell)
Round up if decimal is .50 or higher; round down if less than .50
For student enrolled in more than one payment period, alternate
rounding up and down
The amount used to round is carried forward to the next payment
period and applied before the rounding calculation for that payment
period
School’s policy must be applied equally to all students
Rounding rule does not apply if the amount disbursed would
exceed the Scheduled Award or put the student’s LEU over
600%
23
Calculation of Pell
Always use Pell Formula 4 for
clock-hour/credit-hour non-term programs
• Five steps in the formula
•
1.
2.
3.
4.
5.
Determine enrollment status
Calculate Pell COA
Determine annual award
Determine appropriate payment periods
Calculate aid amount for the payment period
24
Bruce Honer
U.S. Department of Education
8
AACS Financial Aid Workshop
May 2015
Calculation of Pell
•
Step 1: Determine enrollment status
•
•
•
Unlike credit-hour programs that have different payment
charts based on enrollment status (full-time, ¾ time
etc.), you will always use the full-time Pell payment chart
for clock-hour programs, even if a student is attending at
a “part-time” schedule (night classes, morning-only
classes)
Student must be enrolled at least half-time for loan
eligibility (12 clock hours a week)
If enrolled less than half-time, some COA components
must be removed
25
Calculation of Pell
•
Step 2: Pell cost of attendance
•
•
•
Always use the cost for a full-time student for
a full academic year (as you define it)
If program shorter than an academic year,
prorate Pell COA up to what it would be for a
full academic year
If program is longer than a full academic
year and the COA is for the entire program,
prorate Pell COA down to what it would be
for a full academic year
26
Calculation of Pell
•
Step 3: Determine annual award
•
Always use the full-time Pell payment chart (GEN-14-01)
27
Bruce Honer
U.S. Department of Education
9
AACS Financial Aid Workshop
May 2015
Calculation of Pell
•
Step 4: Determine payment periods based on program
academic year and program length
•
•
•
•
Programs equal to or shorter than an academic year
Programs longer than an academic year with a remaining portion
equal to or shorter than half an academic year
Programs longer than an academic year with a remaining portion
greater than half an academic year but less than a full academic
year
Exception for transfer students with clock hours accepted
28
Calculation of Pell
Step 5: Calculate disbursement by payment period
Scheduled award is multiplied by the lesser of:
Clock hours in the payment period
Clock hours in the program’s defined academic year
OR
Weeks of instructional time in the payment period
Weeks of instructional time in the program’s defined
academic year
31
Calculation of Pell (Clock Hour)
Academic Year Defined as 900 hours and 30 weeks
Example 1: Program 1200 clock hours/40 weeks
Payment periods: 450/15, 450/15, 300/10
Clock hrs. in the payment period (450) (300)
Clock hours in the A/Y (900)
Both fractions are the same for all 3 payment periods, so can OR
use either fraction
Weeks in the payment period (15) (10)
Scheduled Award: $5730
Weeks in the A/Y (30)
30
Bruce Honer
U.S. Department of Education
PP1: $5,730 x 450/900 = $2,865
PP2: $5,730 x 450/900 = $2,865
PP3: $5,730 x 300/900 = $1,910
10
AACS Financial Aid Workshop
May 2015
Calculation of Pell
All examples will use an A/Y definition of 900/30
Example #2: Program 720 clock hours/28 weeks
Payment periods: 360/14, 360/14
Clock hrs. in the payment period (360)
Clock hours in the A/Y (900) = 0.4
Clock hours are lesser
OR
Scheduled Award: $5,280
Weeks in the payment period (14)
Weeks in the A/Y (30) = 0.46
PP1: $5,280 x 360/900 = $2,112
PP2: $5,280 x 360/900 = $2,112
31
Calculation of Pell
All examples will use an A/Y definition of 900/30
Example #3: Program 1650 clock hours/48 weeks
Payment periods: 450/15, 450/15, 375/9, 375/9
Calculation for second year
Clock hrs. in the payment period (375)
Clock hours in the A/Y (900) = 0.416
OR
Weeks in the payment period (9)
Weeks in the A/Y (30) = 0.3
Clock hours/weeks are same for first 2 payment periods
Scheduled award: $5,730
PP1: $5,730 x 450/900 = $2,865
PP2: $5,730 x 450/900 = $2,865
Weeks are lesser for last 2 payment periods
PP3: $5,730 x 9/30 = $1,719
PP4: $5,730 x 9/30 = $1,719
43
Calculation of Pell
Will a student always receive Pell each
payment period? It depends on
•
•
•
•
Pell LEU (600%)
Number of payment periods in program and
remaining eligibility in award year
Crossover payment periods and eligibility in new
award year
33
Bruce Honer
U.S. Department of Education
11
AACS Financial Aid Workshop
May 2015
Final Step: COD
Send origination records electronically to COD
Send actual disbursement records electronically to COD
•
•
•
•
No funds in G5 until COD accepts the records
Disbursement date must reflect actual date of disbursement
Resolve all rejects!! (see COD Technical Reference,
Volume II, Section 4: Edits)
•
34
Pell Lifetime Eligibility Used (LEU)
35
Pell Grant Lifetime Eligibility Used (LEU)
•
Student’s maximum duration of Pell eligibility is
6 Scheduled Awards (600%)
•
As measured by percentage of Lifetime Eligibility Used (LEU) field
in COD
Student is ineligible to receive further Pell Grant awards if
he or she has reached or exceeded the 600% limit
• 600% limit is tracked to the beginning of the Pell Grant
program (1973-74)
• Rounding rules do not apply if amount disbursed would
place student’s LEU over 600%
•
36
Bruce Honer
U.S. Department of Education
12
AACS Financial Aid Workshop
May 2015
Pell Grant LEU
•
ED provides weekly Pell LEU reports through the SAIG
Mailbox for school’s Pell eligible applicants (and students
listing the school’s school code on their FAFSA)
•
•
•
Only students with lifetime LEU greater than or equal to 450%
Message Class PGLEXXOP (where XX= the year)
COD website shows current LEU level for all aid
recipients
•
COD also provides LEU for Pell MRR*, Pell Reconciliation Report
and Pell Year to Date file
*Multiple Reporting Record.
37
Pell Grant LEU
COD will return warning edit 177 or 178 where Pell LEU
is near or exceeds 600%
• LEU data also in Common Record Response, CPS
reports, SARS and ISIRS (LEU limit flags and
percentages), and NSLDS
• COD calculates LEU to 3 decimal places
•
•
Use conventional Pell rounding rules but may not round up if the
result if it causes the student to exceed her Scheduled Award or
600% LEU
38
Pell Grant LEU on the ISIR
•
Code “N” under Lifetime Limit Flag
•
•
•
Code “H” under Lifetime Limit Flag
•
•
LEU greater than 400% but less than or equal to 500%
Code “C” under Lifetime Limit Flag
•
•
Student not on report
Students in this category have LEU of less than 400%
LEU greater than 500% but less than or equal to 600%
Code “E” under Lifetime Limit Flag
•
•
LEU 600% or higher
No Pell eligibility for award year covered by the ISIR
•
Student may have already exceeded the maximum lifetime eligibility used amount
39
Bruce Honer
U.S. Department of Education
13
AACS Financial Aid Workshop
May 2015
Pell Grant LEU: Reduced Eligibility
•
Calculating an award for a student whose LEU will reduce
his or her eligibility (LEU greater than 500% but less than
600%
•
•
Subtract LEU percentage from 600%, then multiply the student’s
Scheduled Award by the result
Example: Scheduled Award = $5,645; LEU = 534%
•
•
600% − 534% = 66% Scheduled Award remaining
$5,645 x .66 = $3,725.70 (may truncate to $3,725 or pay $3,725.70, but not round
up)
40
Questions?
41
Direct Loans
Clock Hours
Bruce Honer
U.S. Department of Education
14
AACS Financial Aid Workshop
May 2015
Direct Loan Basics
•
William D. Ford Federal Direct Loan Program
(“Direct Loan” or “DL”)
• Loan types include
• Subsidized Stafford (Sub) - Only for undergraduates • Unsubsidized Stafford (Unsub) ‐ For undergraduates, graduates, and professional students
• PLUS Loan for Graduate and Professional Students (unsubsidized)
• PLUS Loan for Parents (unsubsidized) ‐ For parents of dependent students
Direct Loan Basics
•
•
•
•
•
Regulations at 34 C.F.R.§685 (link from IFAP)
Source of funds is the U.S. Treasury
Money is transmitted via ED’s G5 system
Signed MPN or eMPN required
Counseling required – Entrance & Exit
45
Bruce Honer
U.S. Department of Education
15
AACS Financial Aid Workshop
May 2015
General Direct Loan Requirements
Student must:
• Be enrolled at least halftime
• Meet eligibility
requirements, except for:
• Preparatory
coursework
• Teacher certification
coursework
Reminder: All general Title IV
student eligibility requirements
also apply
School must:
– Determine Pell eligibility
before loans
– Determine loan eligibility
• Subsidized eligibility
before Unsubsidized
• No Adverse Credit
history for PLUS
borrowers
• Aggregate limits
• Other Title IV eligibility
requirements
Direct Loan Interest Rates – 2014-15
Direct Loans first disbursed on or after July 1, 2014 but before July 1, 2015
• Undergrad Sub and Unsub – 4.66% (cap 8.25%)
• Grad Unsub – 6.21% (cap 9.5%)
• PLUS – 7.21% (cap 10.5%)
• Consolidated Loans – weighted average of underlying loans rounded up to the next higher one‐eighth of one percent
• No cap
Subsidized Stafford Loan Eligibility
•
Subsidized loans are need-based
COA – EFC – EFA = Loan Eligibility (Up to the
Annual Subsidized Amount)
•
•
Interest is subsidized during:
•
In-School
•
Grace periods
•
Deferments
School must determine eligibility before
eligibility for unsubsidized loans
Bruce Honer
U.S. Department of Education
16
AACS Financial Aid Workshop
May 2015
Subsidized Loan Eligibility Limit
Limit on how many years a “first-time borrower”
may receive subsidized loans.
 Applies to first-time borrowers on or after July 1,
2013. A first-time borrower is one who 

Has no balance on any FFEL or Direct Loan on July 1,
2013, or
Receives first Direct Loan (any type) on or after July 1,
2013
Subsidized Loan Limit – 150% Rule
 Condition - When student has received Direct
Subsidized loans for a period of time that is equal
to 150% of the published length of the student’s
current academic program
 Result - Student may not receive additional
subsidized loans for enrollment in that program or
any program of equal or lesser length
Subsidized Loan Limit – 150% Rule
 Students maximum time to receive subsidized
loans is established based on the length of the
program the student is enrolled in
 Remaining subsidized eligibility is calculated
by subtracting from maximum eligibility for the
program, the time the student has already
received subsidized loans for enrollment in any
program
Bruce Honer
U.S. Department of Education
17
AACS Financial Aid Workshop
May 2015
Determining When 150% Limit is Met
Maximum
Eligibility
Period
Total
Subsidized
Remaining*
Usage
Periods
Eligibility
Periods
*150% Limit is met when Remaining Eligibility
Period equals zero or less than zero
Unsubsidized Stafford Loan Eligibility
• Unsubsidized loans are not need‐based
COA – EFA = Unsubsidized Loan Amount (Not to exceed the annual loan limits)
• May replace EFC in packaging
• Borrower is responsible for interest
• May be paid or may allow to capitalize
• School determines eligibility AFTER awarding subsidized loans
Direct Unsubsidized Loan Eligibility
• Student can only receive an unsubsidized loan (base or additional) for a loan period if the student has been awarded the full amount of his or her eligibility for a subsidized loan
• Student who is not awarded his or her full subsidized loan eligibility may not receive any unsubsidized loan for the same loan period
Bruce Honer
U.S. Department of Education
18
AACS Financial Aid Workshop
May 2015
Unsubsidized Loan Flexibility
•
•
•
For dependent Undergraduates whose parents
are unable to borrow PLUS loans
Due to adverse credit or
Due to exceptional circumstances
•
May receive additional Unsubsidized loans
(same amount as Independent Undergraduate)
•
Flexibility extends for one Academic Year
Unsubsidized Loan Flexibility
• FAA may use PJ to award Unsubsidized loans
to dependent students without parental data
• Parent must certify cessation of support and refusal
to complete the FAFSA
• School must document both items
• Not a Dependency Override (D/O)
• Student may receive up to his/her maximum
dependent loan eligibility (Unsubsidized)
• Student not eligible for any other Title IV aid
Annual Loan Limits
Independent Undergraduate
Dependent Undergraduate
And Dep. Undergrad whose parent can’t borrow PLUS
1st
$5,500
(maximum $3,500 subsidized)
$9,500
(maximum $3,500 subsidized)
2nd
$6,500
(maximum $4,500 subsidized)
$10,500
(maximum $4,500 subsidized)
3rd and Beyond
$7,500
(maximum $5,500 subsidized)
$12,500
(maximum $5,500 subsidized)
Year
Bruce Honer
U.S. Department of Education
Graduate/ Professional Student
Up to $20,500 each academic year (maximum $8,500 subsidized)
19
AACS Financial Aid Workshop
May 2015
Aggregate Loan Limits
Dependent Undergraduate
$31,000 combined sub/unsub
No more than $23,000 in sub
Independent
Undergraduate*
$57,500 combined sub/unsub
No more than $23,000 in sub
Grad/Professional
$138,500 combined sub/unsub
No more than $65,500 in sub
* Also for dependent students whose parents are unable to
obtain a PLUS loan.
General Loan Awarding Principles
• Students are subject to annual and aggregate loan limits
• Student may not be eligible to borrow the full amount due to other aid in the student’s aid package
• Must award subsidized before awarding unsubsidized
• Base Amount may be all subsidized, all unsubsidized, or a combination.
• Subsidized amount may not exceed the Base Amount
• Annual Loan Limit includes the Base Amount and Additional Unsubsidized
Awarding Subsidized Loans
COA – EFC – EFA = Need
Bruce Honer
U.S. Department of Education
20
AACS Financial Aid Workshop
May 2015
Subsidized Eligibility - Tom
Tom is a 1st year Dependent
Student
(Annual Loan Limit = $5,550)
COA
$15,000
- EFC
1,200
- EFA
$11,080
=Sub DL
$ 2,720
Subsidized Loan can be up to $3,500 of $5,500, but cannot exceed need
• EFA is:
• Pell of $4,580
• Scholarship of $6,500
• Remaining Need = $2,720
Awarding Unsubsidized Loans
COA – EFA = Eligibility
Unsubsidized Eligibility - Tom
Tom is a 1st year Dependent
Student
Unsubsidized Loan can be up to (Annual Loan Limit = $5,550) $2,780 ($5,550 ‐ $2,720 in sub), but total aid cannot exceed COA
COA
$15,000
- EFA
$13,800
=Unsub DL $ 1,200
•
•
•
•
EFA is:
Pell of $4,580
Scholarship of $6,500
Sub Loan of $2,720
• Remaining Eligibility = $1,200
Bruce Honer
U.S. Department of Education
21
AACS Financial Aid Workshop
May 2015
Awarding PLUS COA – EFA = Eligibility
PLUS Loans
PLUS Loans:
•
•
•
•
•
May replace EFC
Have no Annual/Aggregate limit
Borrower must have no adverse credit
School must offer Sub and Unsub before awarding PLUS
Amounts may not exceed COA – EFA
Available for:
• Parents of dependent undergrads
• Graduate/professional students
Patrick’s Parent PLUS Eligibility
Patrick ‐ 1st year Dependent student:
COA
‐EFA
=PLUS eligibility
$20,000
$9,500
$10,500
• Loan limit = COA-EFA
• EFA now includes
– $4,000 Pell
– $3,500 Subsidized loan
– $2,000 Unsubsidized loan
• EFC not considered
• Patrick’s parents may
borrow $10,500
Bruce Honer
U.S. Department of Education
22
AACS Financial Aid Workshop
May 2015
Patrick’s Increased Unsubsidized Eligibility:
(If Parents denied PLUS, or if Patrick were
Independent)
Patrick ‐ 1st year student (loan • EFC not considered
limit $9,500)
• Patrick may borrow the COA
$20,000
lesser of:
‐ EFA
$7,500
= Remaining Need
$12,500
EFA includes:
– $4,000 Pell
– $3,500 Subsidized loan
• COA – EFA = $12,500 , or
• $9,500 ‐ $3,500 = $6,000
(Annual Loan Limit‐Sub Limit = Eligibility)
In an Unsubsidized loan
Patrick’s Aid Package
(If Parents denied PLUS, or if Patrick were Independent)
COA
- EFC
- Pell
- Subsidized Loan
- Unsubsidized Loan
= Remaining Unmet
$20,000
1,519
$4,000
$3,500
$6,000
$4,981
Borrower Based Academic Year
BBAY 3
Bruce Honer
U.S. Department of Education
23
AACS Financial Aid Workshop
May 2015
BBAY 3 Attributes
• BBAY must meet minimum statutory definition of academic year
• 900 clock‐hours / 26 weeks
• 36 quarter credit‐hours / 30 weeks
• 24 semester/trimester credit‐hours / 30 weeks
• Academic year does not begin until the student begins enrollment
• A new annual loan limit is not regained until student completes both weeks & hours in definition of an academic year
Loan Periods
•
Maximum loan period
• Generally school’s academic year
• If > an academic year, in some cases, loan is the
length of the program
•
Minimum loan period
•
It’s the lesser of
• The Academic Year, OR
• The student’s program, OR
• The remaining portion of the program
Payment Periods
• Cannot use more than two payment periods within a defined academic year
• Must complete BOTH hours and weeks to progress from one payment period to the next
Bruce Honer
U.S. Department of Education
24
AACS Financial Aid Workshop
May 2015
BBAY 3 Payment Periods
If program is one academic year or less
Academic Year Defined = 900 Clock-Hours/ 26 Weeks
Program = 750 Clock-Hours/ 20 Weeks
375 clock-hours/ 10 weeks
375 clock-hours/ 10 weeks
BBAY 3 Payment Periods
If program is more than one academic year
With remaining portion that is half an academic
year or less
Academic Year Defined: 900 Clock-hours / 30 Weeks
Program Length is 1200 Clock-hours / 40 Weeks
450 hours / 15 weeks
450 hours / 15 weeks
300 hours / 10 weeks
Remaining portion is a single
payment period
BBAY 3 Payment Periods
If program is more than one academic year
With remaining portion that is more than half an
academic year but less than a full year
Academic Year Defined: 900 Clock-hours / 30 Weeks
Program Length is 1600 Clock-hours / 54 weeks
450 hours
15 weeks
450 hours
15 weeks
350 hours
12 weeks
350 hours
12 weeks
Remaining portion is divided into 2
payment periods
Bruce Honer
U.S. Department of Education
25
AACS Financial Aid Workshop
May 2015
Prorating Annual Loan Limits
Prorating Annual Loan Limits
Annual loan limits must be prorated when
• The student is enrolled in a program that is shorter than a full academic year
• The student is enrolled in a program that is one academic year or more in length, but is in a remaining period of study shorter than a full academic year
Loan Proration
• Proration is NOT required for
–
–
–
–
PLUS loans
Graduate students
Teacher certification
Preparatory coursework
• Regardless of loan proration, school must not award more than student’s loan eligibility
Bruce Honer
U.S. Department of Education
26
AACS Financial Aid Workshop
May 2015
Programs Shorter than an Academic Year
Multiply the applicable loan limit by the lesser of:
Hours enrolled in program
Hours in the defined academic year
Or
Weeks enrolled in program
Weeks in the defined academic year
Programs Shorter than an Academic Year
Program Length is 600 Clock-hours / 22 weeks
Defined AY is 900 Clock-hours / 30 weeks
Weeks: $3,500 X 22 = $2,567
30
Hours: $3,500 X 600 = $2,333
900
Hours is the Lesser
$2,333
300 Hours / 11 Weeks
$1,167
300 Hours / 11 Weeks
$1,166
Remaining Periods Shorter than an AY
If the remaining period of study consists of fewer clock‐ or credit‐hours than required in academic year definition
Bruce Honer
U.S. Department of Education
27
AACS Financial Aid Workshop
May 2015
Remaining Periods Shorter than an AY
• For all program types, multiply the applicable loan limit by:
Hours remaining in program of study
Hours required for defined AY
Unlike proration for programs that are shorter than an
academic year, there is no comparison of weeks and hours
Remaining Periods Shorter than an AY
1,200 Clock-Hour Program with 900
Clock-Hour / 26 Week Academic Year
1st Academic Year
Remaining Portion of Program
$4,500 X 300 = $1,500
900
$3,500
450 Hours
13 Weeks
450 Hours
13 Weeks
$1,750
$1,750
1st BBAY
300 Hours 9
Weeks
$1,500
2nd BBAY
Transfer Students
Bruce Honer
U.S. Department of Education
28
AACS Financial Aid Workshop
May 2015
Transfer Students in Clock-Hour Programs
When Overlapping Academic Years Occur
• Student withdraws from School A program before completing an academic year
• Student begins attendance at School B before academic year from School A is complete
Solution to Overlapping Academic Years
• Student is limited to remaining portion of annual loan limit at School B until completion of the academic year from School A
• When the student completes School A’s academic year at School B a new loan period may begin
– If new loan period is less than a defined academic year then it must be prorated
Obtaining Academic Year Dates
• A school can obtain specific begin and end dates of the prior school’s academic year by:
– obtaining documentation from the prior school, OR
– look for the academic year dates of Direct Loans originated by the prior school on the “award detail information page” in COD
Bruce Honer
U.S. Department of Education
29
AACS Financial Aid Workshop
May 2015
Transfer Student Example
• Student attends School A with an academic year beginning 9/18/14 and ending 3/13/15
• Student withdraws from School A on 11/29/14
• As grade level 1 student, this student received $1,750 in Sub and $1,000 in Unsub
• Student begins attendance at School B on 12/15/14
Student may only receive remaining portion of loan not used until completion of School A’s academic year
Transfer Student Example
School A: Used $1,750 Sub and $1,000 Unsub
School A’s Academic Year
9/18/14
3/13/15
School B Loan Period
3/13/15
12/15/14
School B: New Loan
period may0 begin on
3/14/15
School B: Student eligible
for remaining $1,750 Sub
and $,1000 Unsub
Withdrew
11/29/2014
Withdrawals
Bruce Honer
U.S. Department of Education
30
AACS Financial Aid Workshop
May 2015
When a Student is Considered Withdrawn
In the case of a program that is measured in clock hours,
the student does not complete all of the clock hours and
weeks of instructional time in the payment period or period
of enrollment that the student was scheduled to complete.
Institution Required to Take Attendance
Outside entity requires that attendance be taken
Institution has its own requirement that instructors take
attendance
• Outside entity or institution has a requirement that can
only be met by taking attendance
• All clock hour programs are required to take attendance
•
•
Withdrawal Date / Date of Determination
• Must use its official attendance records to determine withdrawal date (WD)
• Last date of attendance must be withdrawal date
• Date of determination of withdrawal cannot be more
than 14 calendar days after withdrawal date
Bruce Honer
U.S. Department of Education
31
AACS Financial Aid Workshop
May 2015
Date of Determination & Deadlines
• Within 30 days, school must
– perform R2T4 calculation
– notify student of grant overpayment
– notify student of eligibility for a post-withdrawal
disbursement (PWD)
• School must return Title IV funds within 45 days of date of
determination
• School must make PWD to student or parent within 45 days
from date of determination for grants and 180 days for loans
Reentry within 180 Days
• For programs measured in clock hours, a student who
withdraws and then reenters the same program within
180 days is considered to be in the same payment
period he or she was in at the time of the withdrawal.
• The student retains his or her original eligibility for that
payment period and is treated as though he or she did
not cease attendance.
Resources
Bruce Honer
U.S. Department of Education
32
AACS Financial Aid Workshop
May 2015
Resources
FSA Handbook
Volume 3, Chapter 3 (Pell)
Volume 3, Chapters 1 and 5 (Loans)
Volume 5 (Withdrawals)
Site Links
https://studentaid.ed.gov/types/loans
https://studentloans.gov
Resources
Direct Loan Training on IFAP
www2.ed.gov/offices/OSFAP/training/specific.html
Clock‐Hour Issues recorded webinar
www2.ed.gov/offices/OSFAP/training/downloads.html
Resources
Research and Customer Care Center
800-433-7327
fsa.customer.support@ed.gov
Reach FSA
855-FSA-4FAA -- 1 number to reach 10 contact centers!
Campus Based Call Center
eZ-Audit
COD
School Eligibility Service Group
CPS/SAIG
Foreign Schools Participation Division
NSLDS
Research and Customer Care Center
G5
Nelnet Total & Permanent Disability Team
Bruce Honer
U.S. Department of Education
33
AACS Financial Aid Workshop
May 2015
QUESTIONS?
Contact Information
For questions about this training, contact me:
Bruce Honer, Training Officer,
Federal Student Aid, Region IX
bruce.honer@ed.gov – 415-486-5521
For comments on training, contact:
Annmarie Weisman, Training Supervisor
Thank
you for
coming!
Federal Student Aid, Region III
annmarie.weisman@ed.gov – 215-656-6456
Bruce Honer
U.S. Department of Education
34