R-FTB-Q1: Will a borrower be identified as “first-time borrower” on or after July 1, 2021?
Any individual that has been identified as a “first-time borrower” prior to July 1, 2021, will continue to be identified as a “first time borrower.” Any individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2021, or on the date the borrower obtains a Direct Loan with an earliest disbursement date (EDD) on after July 1, 2021, will not be identified as a “first-time borrower”. [July 9, 2021]
R-FTB-Q2: What does it mean to be a “first-time borrower” after July 1, 2021?
A first-time borrower is an individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2013, or on the date the borrower obtains a Direct Loan after July 1, 2013, but before July 1, 2021.
The 150% borrowing limitation will not be applied to Direct Loans made to first-time borrowers with an earliest disbursement date (EDD) on or after July 1, 2021. The 150% borrowing limitation will be applied to Direct Loans made to first-time borrowers with an earliest disbursement date (EDD) on or after July 1, 2013, and prior to July 1, 2021. [July 9, 2021]
R-BL-Q1: After SULA is repealed, how will the 150% borrowing limitation be applied?
The 150% borrowing limitation will be applied to Direct Subsidized Loans with an earliest disbursement date (EDD) on or after July 1, 2013, and prior to July 1, 2021. [July 9, 2021]
R-BL-Q2: If a borrower exceeds his or her 150% borrowing limitation, will the borrower be eligible for additional subsidized loans?
The 150% borrowing limitation will only be applied to loans with an earliest disbursement date before July 1, 2021. If a new subsidized loan is disbursed for a borrower that has previously exceeded their 150% borrowing limitation and the earliest disbursement date (EDD) is prior to July 1, 2021, then the borrower is not eligible for that subsidized loan.
If a new subsidized loan is disbursed for a borrower that has previously exceeded their 150% Borrowing Limitation and the earliest disbursement date (EDD) is on or after July 1, 2021, then the borrower is eligible for that subsidized loan as long as the borrower meets all the other eligibility requirements, like not having exceeded their Annual Loan Limit.
Note: If school processes and systems have flexibility, we strongly encourage schools to disburse new Direct Subsidized Loans on or after July 1, 2021, to ensure borrowers receive the maximum benefit of the regulatory changes. [July 9, 2021]
R-BL-Q3: Will the Maximum Eligibility Period (MEP), Subsidized Usage Period (SUP) and Remaining Eligibility Period (REP) still be calculated after July 1, 2021?
Yes. The MEP, SUP and REP will still be calculated and applied to subsidized loans made to “first-time borrowers” with an earliest disbursement date (EDD) before July 1, 2021. The SUP will continue to be sent from COD to NSLDS and NSLDS will continue to send the SUP to CPS for inclusion on the ISIR. The MEP, SUP and REP will not be calculated or applied to subsidized loans with an EDD on or after July 1, 2021. [July 9, 2021]
R-BL-Q4: Can schools ignore SULA starting with the 2021–22 award year?
The 150% borrower limitation will continue to be applied to subsidized loans with an earliest disbursement date (EDD) prior to July 1, 2021. If the school is disbursing new subsidized loans or adjusting existing subsidized loans in the 2021–22 award year that have an earliest disbursement date (EDD) before July 1, 2021, then they should be aware that 150% borrower limitations continue to apply to those loans. [July 9, 2021]
R-CON-Q1: Will the Department automatically change unsubsidized loans into subsidized loans if the borrower was denied a subsidized loan for reaching their SULA borrowing limit?
No. While the Department is able to assume that unsubsidized loans were disbursed in place of subsidized loans in limited circumstances, it is not possible for the Department’s systems to determine all the additional considerations that must be made in order to award a subsidized loan. Additionally, reallocation of an unsubsidized loan to a subsidized loan would have financial reconciliation implications for each school. [July 9, 2021]
R-CON-Q2: If a student was awarded a reduced amount of Subsidized Loan funding due to hitting the 150% SULA limit for disbursements prior to July 1, 2021, for award year that crosses July 1, 2021, would a school be allowed to award the difference in a new Subsidized Loan for the same award year (if the disbursement will occur on or after July 1, 2021)?
Yes, as long as the loan period was still open after July 1, 2021, and the student meets all other eligibility requirements a new Subsidized Loan could be awarded. However, if the loan period has ended, the school would be unable to originate a new loan. This is because a school cannot originate a loan after the loan period has ended. [July 9, 2021]
R-CON-Q3: If a student had not been awarded a Subsidized Loan for the current award year due to hitting the 150% SULA limit, but was awarded an Unsubsidized Loan which had the first disbursement occur prior to July 1, 2021, could a school cancel the Unsubsidized Loan and then award a Subsidized Loan (with a first disbursement scheduled for July 1, 2021, or after)?
Yes, as long as the loan period for the original Unsubsidized loan is still open as of July 1, 2021, and the student meets all other eligibility requirements to receive a Subsidized Loan, the school could make a downward adjustment to the Unsubsidized Loan and then originate a new Subsidized Loan for an equivalent amount (it is possible the student’s Subsidized Loan eligibility could be less than the full amount of Unsubsidized Loan previously awarded). [July 9, 2021]
R-LOS-Q1: If a borrower exceeds their 150% limit based on enrollment data, will Loss of Subsidy be applied?
No. On July 1, 2021, NSLDS will cease to calculate Loss of Subsidy for any subsidized loan regardless of the subsidized loan’s EDD. [July 9, 2021]
R-LOS-Q2: If a borrower has Loss of Subsidy applied to a subsidized loan, will the Loss of Subsidy be reinstated?
The federal loan servicers, with the help of NSLDS, will reinstate subsidy benefits to any subsidized loan with a balance greater than zero on July 1, 2021. If a subsidized loan has a zero balance on or before July 1, 2021, then the subsidized loan will not have its subsidy benefits reinstated. [July 9, 2021]
R-LOS-Q3: If a borrower has Loss of Subsidy reinstated, can the school increase the amount of existing subsidized loans or award new subsidized loans with an earliest disbursement date (EDD) prior to July 1, 2021?
Probably not. The 150% borrowing limitation will continue to apply to subsidized loans with an EDD prior to July 1, 2021. Reinstatement of subsidy benefits does not impact the borrower’s eligibility for increased or additional subsidized loans. [July 9, 2021]
R-LOS-Q4: How long will it take for Loss of Subsidy to be reinstated?
The federal loan servicers will begin the process of notifying impacted borrowers immediately after July 1, 2021. It may take a few weeks for all borrowers to be notified. [July 9, 2021]
R-LOS-Q5: What does it mean when Loss of Subsidy is reinstated? Is it retroactive?
When Loss of Subsidy is reinstated, the federal loan servicer will retroactively apply subsidy benefits to any period of time, such as an in-school deferment, during which the borrower would have been entitled to subsidy benefits. This includes reversing accrued interest and reapplying payments, where appropriate. [July 9, 2021]
R-LOS-Q6: If a borrower has their Loss of Subsidy reinstated, will the borrower be notified?
Yes. Similar to the existing notification process, borrowers will be notified by their federal loan servicer when Loss of Subsidy has been reinstated. Additionally, the Student Aid Summary will be updated accordingly on the StudentAid.gov website. [July 9, 2021]
R-LOS-Q7: If a borrower has their Loss of Subsidy reinstated, will the school be notified?
When Loss of Subsidy is reinstated, the NSLDS website will be updated and a postscreening transaction will be sent to schools if there is an active ISIR on record at NSLDS. School users can also see a version of the Student Aid Summary on fsapartners.ed.gov. [July 9, 2021]
R-COD-Q1: Will schools still be expected to report enrollment data to the COD System?
Yes. Schools will continue to be required to report a borrower’s Published Program Length, Program CIP code, Program Credential Level, and applicable Special Program in order to process a disbursement. [July 9, 2021]
R-COD-Q2: When will COD Reject Edit 206 be generated?
Edit 206, which is triggered when a borrower’s remaining subsidized eligibility period is less than zero for an award, will continue to be returned, when applicable, on loans with an earliest disbursement date before July 1, 2021. [July 9, 2021]
R-COD-Q3: When will COD Reject Edit 207 be generated?
Edit 207, which is triggered when a borrower’s remaining subsidized eligibility period is less than zero after a disbursement is approved from the Action Queue, will continue to be returned, when applicable, on loans with an earliest disbursement date before July 1, 2021. [July 9, 2021]
R-COD-Q4: Why is COD Warning Edit 200 triggering for a borrower with an award with an earliest disbursement date (EDD) on or after July 1, 2021?
COD warning edit 200 (Subsidized Usage Applies to borrower) will continue to trigger at the borrower level for anyone who has a SULA indicator set to “Y”. Although the warning edit may continue to trigger, the COD System will not calculate subsidized usage on Direct Loans with an earliest disbursement date on or after July 1, 2021. [July 9, 2021]
R-COD-Q5: For Direct Subsidized Loans accepted by the COD System prior to July 1, 2021, with an earliest disbursement date (EDD) on or after July 1, 2021, will the COD System reevaluate any subsidized usage that was previously applied to those loans?
Yes, for any subsidized loans with an EDD on or after July 1, 2021, that had previously had usage applied, the COD System will perform a recalculation to remove the usage from those loans and reevaluate the usage on any other impacted loans. [July 9, 2021]
R-COD-Q6: How will the COD System notify schools of any changes to the subsidized usage period for previously accepted loans?
The COD System will notify schools of any subsidized usage period calculation changes by sending the Direct Loan Subsidized Usage (message class: CRSUYYOP) system-generated response. [July 9, 2021]
R-NSLDS-Q1: Will schools be required to report program-level enrollment reporting to NSLDS? Is program-level enrollment reporting changing?
Schools will be required to continue to report program-level enrollment reporting to NSLDS utilizing the enrollment reporting instructions as they do today. [July 9, 2021]
R-NSLDS-Q2: Why do schools have to continue reporting program-level enrollment reporting to NSLDS if SULA is being repealed?
Schools currently report program-level data on all borrowers and grant-recipients, not just SULA-eligible borrowers. The program-level reporting is used in a number of functions such as program oversight, measurement of program outcomes, processing of Closed School Discharges, and the metrics included in the College Scorecard. [July 9, 2021]
R-NSLDS-Q3: The Enrollment Reporting Guide has a lot of references to SULA. Will it be updated?
The Enrollment Reporting Guide will be updated in late fall 2021 to update the references to SULA but schools will be required to continue to report program-level enrollment reporting. [July 9, 2021]
R-NSLDS-Q4: Will there still be SULA-eligible loans in NSLDS?
Yes. Any subsidized loan that has been identified as SULA-eligible with a D0 loan type will continue to be identified as SULA-eligible. Any subsidized loan with an EDD on or after July 1, 2021, will be identified as a regular subsidized loan with a D1 loan type. Any subsidized consolidation loan that has been identified as SULA-eligible with a D9 loan type will continue to be identified as SULA-eligible. Any subsidized consolidation loan made after July 1, 2021, will be identified with a D6 loan type. [July 9, 2021]
R-NSLDS-Q5: Will there still be SULA Flags for “first-time borrowers” displayed on NSLDS?
The SULA Flag, SULA Date, and SULA icon that identifies a “first-time borrower” on the NSLDS website will continue to be displayed for “first-time borrowers” when applicable. [July 9, 2021]
R-NSLDS-Q6: Will there continue to be new or revised MEPs, SUPs and REPs displayed on NSLDS?
NSLDS will continue to calculate the MEP and REP based on the most recent enrollment data for ‘first-time borrowers” with subsidized loans that have an EDD before July 1, 2021. If a borrower does not have any subsidized loans with an EDD before July 1, 2021, then neither a MEP nor a REP will be calculated. The NSLDS website will always display a SUP when it is received from the COD System.
On or after July 1, 2021, the MEP, SUP and REP on NSLDS will be considered informational-only and will not have any impact on the 150% borrowing limitation or Loss of Subsidy. [July 9, 2021]
R-NSLDS-Q7: Will there still be Loss of Subsidy and Reinstatement of Subsidy displayed on NSLDS?
The federal loan servicers will continue to update NSLDS as they process Loss of Subsidy reinstatements. Any loan that has had its Loss of Subsidy reinstated will have the appropriate status displayed on the Loan History and Subsidy Usage pages. Loans that are in a Loss of Subsidy status but have a zero balance on July 1, 2021, will continue to display in a Loss of Subsidy status. [July 9, 2021]
R-NSLDS-Q8: What is changing in Transfer Student Monitoring (TSM) and Financial Aid History (FAH)?
There are no changes to Transfer Student Monitoring (TSM) or Financial Aid History (FAH). No new fields will be added to record layouts and no new codes will be added to existing fields to support SULA Repeal. Additionally, TSM will use the same triggers as it does today to create SULA-related alerts. [July 9, 2021]
R-CPS-Q1: Is prescreening changing?
No. The same data elements that are provided on the ISIR today will continue to be provided in the future; however, the data provided will be specific to the changes described above. [July 9, 2021]
R-CPS-Q2: What is Postscreening Reason 25 and is it changing?
Postscreening Reason 25 identifies when the SULA Flag changes and is effectively identifying when a borrower changes from being a “first-time borrower” to no longer being a “first-time borrower” or vice versa. As described in R-FTB-Q1, borrowers who have been identified as “first-time borrowers” will continue to be identified as “first-time borrowers” and new borrowers after July 1, 2021, will not be considered “first-time borrowers”. Because the borrowing limits will continue to apply to loans with an earliest disbursement date (EDD) prior to July 1, 2021, schools will still need to be notified if the SULA Flag is changing. [July 9, 2021]
R-CPS-Q3: What is Postscreening Reason 26 and is it changing?
Postscreening Reason 26 identifies when a loan has Loss of Subsidy applied or when Loss of Subsidy is reinstated. Schools will continue to be notified as the subsidy status of loans are changing and should expect to receive a large amount of transactions when the bulk of loans in Loss of Subsidy are reinstated after July 1, 2021. [July 9, 2021]
R-CPS-Q4: What is Postscreening Reason 27 and is it changing?
Postscreening Reason 27 identifies when the Sum Subsidy Usage Period (SUP) for a borrower has decreased in case that decrease provides for additional subsidized loan eligibility. The Department expects that most borrowers that currently have a Sum SUP for subsidized loans with an earliest disbursement date (EDD) prior to July 1, 2021, will not have any changes to their Sum SUP after July 1, 2021, as the COD System will not be calculating SUP for any subsidized loan with an earliest disbursement date (EDD) on or after July 1, 2021. Because the borrowing limits and Sum SUP will continue to apply to loans with an earliest disbursement date (EDD) prior to July 1, 2021, schools will still need to be notified if the Sum SUP is decreasing. [July 9, 2021]
R-CPS-Q5: What should schools expect after July 1, 2021?
Schools should expect to see a larger than normal volume of Postscreening Reason 26 after July 1, 2021, when the subsidy is reinstated for loans that are in a Loss of Subsidy status. The Department expects that the volume of Postscreening Reasons 25, 26 and 27 will decrease over time. [July 9, 2021]
R-CPS-Q6: Is anything changing on the ISIR?
No. No new fields will be added to ISIR, and no new codes will be added to existing fields in the ISIR to support SULA Repeal. [July 9, 2021]
R-SAG-Q1: What is changing in the Annual Student Loan Acknowledgment?
The Annual Student Loan Acknowledgment primarily directs the user to Aid Summary feature for additional SULA-related details. The link to Aid Summary will be updated appropriately. [July 9, 2021]
R-SAG-Q2: What is changing in Aid Summary?
In addition to some minor content updates, the Subsidized Loan Usage graph will be replaced with a static timeline graphic demonstrating the impact of the SULA Repeal. [July 9, 2021]
R-SAG-Q3: What is changing in Entrance Counseling?
SULA-related content will be removed from entrance counseling. [July 9, 2021]
R-SAG-Q4: What is changing in Exit Counseling?
In addition to some minor content updates, the Loss of Subsidy icon will be removed from the loan-level display in exit counseling. [July 9, 2021]