The following are changes made to federal student aid programs by the recently enacted Consolidated Appropriations Act 2012 and Budget Control Act of 2011. We are also including other changes that may affect your financial aid eligibility or application process for Summer 2012 and 2012-2013.
Summer 2012 Pell Update
Year Round Pell provisions ended at the conclusion of the 2010-11 award year. Students will no longer be able to receive a Second Pell Grant in one award year as of 2011-12. Students who received the annual maximum Pell award in Fall 2011-Spring 2012 will not be eligible for Pell in Summer 2012.
2012 - 2013
Free Application For Federal Student Aid (FAFSA) Update
Starting award year 2012-2013, we strongly advise students to use the IRS Data Retrieval Tool within the FAFSA to provide income tax information. The IRS Data Retrieval Tool will allow FAFSA applicants to request and retrieve their income tax data from the IRS in order to complete the FAFSA. Please note, if students do not use the IRS Data Retrieval Tool and are selected for financial aid verification, they will be required to obtain an official tax transcript from the IRS. Financial Aid will no longer accept Income Tax Returns.
Effective 2012-13, students selected for verification can no longer submit signed tax returns. Students who get selected for verification and when completing the FAFSA did not use the IRS Data Retrieval Tool will be required to provide an IRS Tax Transcript or make corrections to their FAFSA by using the IRS Data Retrieval Tool. Due to this new requirement, we strongly encourage all students to utilize the FAFSA-IRS Data Retrieval process when completing their FAFSA to limit requests for the Tax Return Transcripts.
Students may not receive federal aid for courses that were previously taken and passed beyond the first retake. In other words, once a student has passed a course, the student has one additional attempt to complete the same course and still be eligible to receive federal financial aid for that course. There is no limit on the number of attempts allowable if the student does not receive a passing grade. Some courses are repeatable per university policy and are not restricted by these regulations.
Pell Grant Duration of Eligibility
Effective 2012-2013, the duration of a student’s eligibility to receive a Federal Pell Grant is reduced from 18 semesters or its equivalent, to 12 semesters or its equivalent. The calculation of the duration of a student’s eligibility will include all years of the student’s receipt of Federal Pell Grant funding.
Elimination of Subsidized Loan Eligibility for Graduate/Professional Students
Effective for loan periods beginning on or after July 1, 2012, graduate and professional students will no longer receive Subsidized Loans. As a result, graduate and professional students will be awarded Unsubsidized Loans, which means the loan will accrue interest while a student is in school. These changes will not affect the annual and aggregate borrowing limits. The maximum amount a student can borrow will remain at $20,500 per academic year.
Direct Loan Borrower Repayment Incentives Eliminated
The Budget Control Act terminates the authority of the Department of Education to offer any repayment incentives to Direct Loan borrowers to encourage on-time repayment of loans, including any reduction in the interest rate. The law continues to authorize the Department of Education to offer interest rate reductions to Direct Loan borrowers who agree to have electronic payments automatically debited from a bank account.
Direct Loan Origination Fee Rebate Eliminated
Effective for loan periods beginning on or after July 1, 2012, the up-front rebate that has been provided to Direct Loan borrowers at the time of their loan disbursement will be eliminated. As a result, the origination fee for the Direct Stafford Loans will be 1.5% (previously at 1.0%) and the origination fee for the Direct PLUS Loans will be 4.0% (previously at 2.5%).
Grace Period Interest Subsidy Temporarily Eliminated
Interest subsidies provided on Direct Subsidized Loans during the six month grace period will be temporarily eliminated for Direct Loans whose first disbursement is made on or after July 1, 2012 and before July 1, 2014.
Direct Loan Interest Rates
Effective for loan periods beginning on or after July 1, 2012, the subsidized and unsubsidized Direct Stafford Loan interest rate for the 2012-13 academic year will be fixed at 6.8%. The interest rate for the Direct PLUS and Graduate PLUS Loan is fixed at 7.9%.