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This resource is being maintained for historical purposes only and is not currently applicable.

William D. Ford Federal Direct Loan Program - Contents

AwardYear: 1997-1998
EnterChapterNo: 11
EnterChapterTitle: William D. Ford Federal Direct Loan Program
SectionNumber:
SectionTitle: Contents
PageNumbers: 0


INTRODUCTION . . . . . 1

SECTION 1: ELIGIBILITY . . . . . 3
Student Borrower Eligibility . . . . . 3
Parent Borrower Eligibility . . . . . 6
Eligibility After Bankruptcy Discharge . . . . . 7
Refusal to Originate a Loan . . . . . 7
Institutional Eligibility . . . . . 8
Withdrawing from the Direct Loan Program . . . . . 10

SECTION 2: DIRECT SUBSIDIZED LOANS, DIRECT
UNSUBSIDIZED LOANS, AND DIRECT PLUS LOANS . . . . 11
Credit History . . . . . 11
Loan Limits . . . . . 12
Prorated Annual Loan Limits--Direct
Subsidized and Unsubsidized Loans . . . . . 17
Interest Rates . . . . . 20
Additional Borrowing Costs . . . . . 23
Grace Periods--Direct Subsidized and Unsubsidized Loans . . . . . 23
Repayment . . . . . 24
Deferment . . . . . 29
Forbearance . . . . . 33
Discharge . . . . . 35
Department of Defense Repayment . . . . . 37
Borrower Defenses . . . . . 37

SECTION 3: DIRECT CONSOLIDATION LOANS . . . . . 39
Types of Direct Consolidation Loans . . . . . 39
Loan Limits . . . . . 41
Interest Rates . . . . . 41
Additional Borrowing Costs . . . . . 42
Eligibility . . . . . 42
Regular Consolidation . . . . . 43
In-School Consolidation . . . . . 45
PLUS Loan Consolidation . . . . . 47
Consolidating Defaulted Loans . . . . . 47
Subsequent Consolidation . . . . . 48
Repayment . . . . . 49
Holder Responsibilities . . . . . 50

SECTION 4: DEFAULT . . . . . 53
Default's Effect on Borrowers . . . . . 53
Default's Effect on Schools . . . . . 56
Public, Private Nonprofit, or Proprietary
Degree-Granting Schools . . . . . 56
Proprietary Non-Degree-Granting Schools . . . . . 58
Weighted Average Cohort Rate (Dual-
Program Cohort Rate) . . . . . 59
Cohort Default Rates for Schools that Change Status . . . . . 59
Consequences Associated with Official Cohort
Default Rates Above Certain Thresholds . . . . . 61
Appeal Procedures for Schools with High
Official Cohort Default Rates . . . . . 62
Erroneous Data . . . . . 63
Exceptional Mitigating Circumstances . . . . . 63
General Requirements to Reduce Defaults . . . . . 65

SECTION 5: SCHOOL RESPONSIBILITIES . . . . . 67
Determining the Loan Period . . . . . 67
Disbursements . . . . . 69
Number of Disbursements . . . . . 70
Timing of Disbursements . . . . . 71
Additional Disbursement Requirements . . . . . 73
Other School Responsibilities . . . . . 75
Counseling Borrowers . . . . . 75
Entrance Counseling . . . . . 76
Exit Counseling . . . . . 78
Verification . . . . . 80
Overawards . . . . . 80
Refunds . . . . . 80
Reconciliation . . . . . 80
Student Status Confirmation Report Requirements . . . . . 80
Recordkeeping and Audits . . . . . 81

APPENDIX: TYPE OF ACADEMIC YEAR/FREQUENCY FOR
ANNUAL LOAN LIMITS . . . . . 83
Standard Academic Year . . . . . 85
Making Loans for Standard Academic Years . . . . . 85
Borrower-Based Academic Year . . . . . 86
Making Loans for Borrower-Based Academic Years . . . . . 87

Last Modified: 03/02/1998