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Appendix E: Guide to U.S. Department of Education Programs

PublicationDate: 7/1/95
ChapterNumber:
ChapterTitle: Appendix E: Guide to U.S. Department of Education Programs
SectionNumber:
SectionTitle: Guide to U.S. Department of Education Programs
PageNumbers: E1-E14


FEDERAL PELL GRANT PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

ELIGIBILITY DETERMINATION
School reviews the Institutional Student Information Record
(ISIR) or Student Aid Report (SAR) produced by CPS.

If the student has been selected for verification, the school verifies
the ISIR or SAR. If there are errors or conflicting information, the
school reprocesses the ISIR or SAR.

School determines the student's eligibility on the basis of the
Expected Family Contribution (EFC).

AWARD DETERMINATION
School determines amount of the student's Pell Grant award on the
basis of EFC, cost of attendance (COA), enrollment status, length
of enrollment, and defined academic year.

AWARD AMOUNT
Annual award maximum is $2,340 for 1995-96.

DISBURSEMENT TO STUDENT
Funds are to be disbursed within either 1 or 3 days after receipt
from ED/PMS. School disburses the Pell Grant in at least two
payments per academic year.

School may disburse directly to the student by check or may credit
the student's account for allowable charges owed to the school.
Student may authorize the school, in writing, to credit his or her
account for other goods and services.

REPAYMENT
No repayment necessary.

CAMPUS-BASED PROGRAMS
- Federal Supplemental Educational Opportunity Grant (FSEOG)
Program

- Federal Work-Study (FWS) Program

- Federal Perkins Loan (FPL) Program

FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY
GRANT (FSEOG) PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

ELIGIBILITY DETERMINATION
School reviews and verifies Institutional Student Information
Record (ISIR) or Student Aid Report (SAR).

School determines the student's eligibility on the basis of the
Expected Family Contribution (EFC).

When selecting FSEOG recipients, a school must make awards
first to applicants with exceptional need and give priority to
applicants who receive Federal Pell Grants.

AWARD DETERMINATION
School determines amount of FSEOG award according to the
student's financial need, school packaging policy, and available
funds.

AWARD AMOUNT
The annual maximum award amount is $4,000 in 1995-96, except
in the case of study abroad, where up to $400 more a year may be
awarded.

DISBURSEMENT TO STUDENT
Funds are to be disbursed within either 1 or 3 days after receipt
from ED/PMS. School disburses the FSEOG in at least two
payments per academic year.

School may disburse directly to the student by check or credit the
student's account for allowable charges owed to the school.
Student may authorize the school, in writing, to credit his or her
account for other goods and services.

REPAYMENT
No repayment necessary.

FEDERAL WORK-STUDY (FWS) PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

ELIGIBILITY DETERMINATION
School reviews and verifies Institutional Student Information
Record (ISIR) or Student Aid Report (SAR).

School determines the student's eligibility on the basis of the
Expected Family Contribution (EFC).

AWARD DETERMINATION
School determines amount of student's FWS award on the basis of
student's financial need, school packaging policy, and available
funds.

AWARD AMOUNT
There is no required annual award amount. However, the award
amount is an estimate of total wages to be earned during an award
year at an hourly rate that must equal or exceed the federal
minimum wage.

DISBURSEMENT TO STUDENT
Funds are to be disbursed within either 1 or 3 days after receipt
from ED/PMS. School pays the student directly by check or by
crediting the student's account at least once a month. Only the
nonfederal share of wages may be credited to the student's
account.

The FWS federal/nonfederal share must be calculated and paid
monthly. The school should not use just federal funds each month
and then use the nonfederal funds at the end of the school year.

Off-campus employers pay FWS student employees at least once a
month.

REPAYMENT
No repayment is necessary.

FEDERAL PERKINS LOAN (FPL) PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

ELIGIBILITY DETERMINATION
School reviews and verifies the Institutional Student Information
Record (ISIR) or Student Aid Report (SAR).

School determines the student's eligibility on the basis of the
Expected Family Contribution (EFC).

AWARD DETERMINATION
School determines amount of Perkins award according to the
student's financial need, school packaging policy, and available
funds.

AWARD AMOUNT
Annual maximum awards of $3,000 for undergraduate students
(cumulative amount is $15,000) and $5,000 for graduate or
professional students (cumulative amount is $30,000, including
undergraduate loan amounts).

At schools with the Expanded Lending Option (ELO), amounts
differ--maximum award of $4,000 for undergraduate students
(cumulative amount is $20,000) and $6,000 for
graduate/professional students (cumulative amount is $40,000,
including undergraduate loan amounts) and a cumulative amount
of $8,000 for all other students.

DISBURSEMENT TO STUDENT
Funds are to be disbursed within 1 or 3 days after receipt from
ED/PMS. School disburses the Perkins Loan in at least two
payments per academic year.

School may disburse directly to the student or credit the student's
account for allowable charges owed to the school. Student may
authorize the school, in writing, to credit his or her account for
other goods and services.

REPAYMENT
Repayment begins nine months after the student graduates or
drops below half-time enrollment. There is a minimum monthly
payment of $40 and up to a 10-year repayment period. The
interest rate during repayment is 5 percent. No interest is charged
while the student is enrolled at least half time.


FEDERAL FAMILY EDUCATION LOAN PROGRAM

- Federal Stafford Loan (Subsidized) Program

- Unsubsidized Federal Stafford Loan Program

- Federal PLUS Loan Program (for parents)

FEDERAL STAFFORD LOAN (SUBSIDIZED) PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

Student obtains a loan application from a lender, school, or
guaranty agency, completes borrower's section, and submits the
application to the school.

ELIGIBILITY DETERMINATION
School reviews and verifies the Institutional Student Information
Record (ISIR) or Student Aid Report (SAR) and other eligibility
requirements, certifies the school section of the loan application,
and forwards the application to the lender.

Lender approves the loan and forwards the application to the
appropriate guaranty agency for guarantor's approval.

AWARD DETERMINATION
School determines amount of Federal Stafford Loan on the basis
of the student's financial need, Expected Family Contribution
(EFC), cost of attendance (COA), estimated financial assistance
(EFA), enrollment status, length of enrollment, and defined
academic year. Award cannot exceed the COA minus EFC minus
EFA.

AWARD AMOUNT
Annual award maximums for undergraduate students are: first
year $2,625, second year $3,500, and third year and beyond,
$5,500 per academic year (cumulative amount for an
undergraduate student is $23,000).

Annual award maximum for a graduate or professional student is
$8,500 per academic year (cumulative amount for graduate or
professional students, including undergraduate loan amounts, is
$65,500).

DISBURSEMENT TO STUDENT
Lender disburses loan to the school, by electronic funds transfer
(EFT), master check, or check made co-payable to the student and
school.

School obtains the student's endorsement (if necessary), credits the
student's account for allowable charges owed the school, and
delivers remaining proceeds to the student.

REPAYMENT
Repayment begins six months after the student graduates, leaves
school, or drops below half-time enrollment.

There are three repayment plans: Fixed Repayment Plan,
Graduated Repayment Plan, and Income-Sensitive Repayment
Plan. The monthly payment varies on the basis of the plan
selected by the borrower; however, there is an annual minimum
payment of $600 and up to a 10-year repayment period, excluding
periods of deferment and forbearance. The interest rate is variable
and may change July 1 of each year, but it will never exceed
8.25 percent.

The U.S. Department of Education pays the interest on the loan
while the student is in school, during grace periods, and during
authorized periods of deferment.

UNSUBSIDIZED FEDERAL STAFFORD LOAN PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

Student obtains a loan application from a lender, school, or
guaranty agency, completes the borrower's section, and submits
the application to the school.

ELIGIBILITY DETERMINATION
School reviews and verifies Institutional Student Information
Record (ISIR) or Student Aid Report (SAR), and other eligibility
requirements, certifies school section of loan application, and
forwards the application to the lender.

Lender approves loan and forwards application to the appropriate
guaranty agency for guarantor's approval.

AWARD DETERMINATION
School determines amount of Unsubsidized Stafford Loan on the
basis of student's cost of attendance (COA), estimated financial aid
(EFA), enrollment status, length of enrollment, and defined
academic year. Award cannot exceed the COA minus EFA.

AWARD AMOUNT
Annual award maximums for undergraduate students are: first
year $2625, second year $3,500, and third year and beyond,
$5,500 per academic year (cumulative amount is $23,000).

Additional unsubsidized loan amounts may be borrowed by
independent undergraduates and dependent undergraduates whose
parents cannot obtain a PLUS loan. In these cases, the additional
amounts that may be borrowed are: first year and second year
$4,000; third and beyond, $5,000 per academic year (cumulative
amount is $23,000).

Annual award maximum for a graduate or professional student is
$18,500 per academic year, of which at least $10,000 must be in
unsubsidized loans (cumulative amount for a graduate or
professional student, including undergraduate loan amount, is
$138,500.

DISBURSEMENT TO STUDENT
Lender disburses loan to the school, by electronic funds transfer
(EFT), master check, or check made co-payable to the student and
school.

School obtains the student's endorsement (if necessary), credits the
student's account for allowable charges owed to the school, and
delivers remaining proceeds to the student.

REPAYMENT
Repayment begins six months after the student graduates, leaves
school, or drops below half-time enrollment.

There are three repayment plans: Fixed Repayment Plan,
Graduated Repayment Plan, and Income-Sensitive Repayment
Plan. The monthly payment varies on the basis of the plan
selected by the borrower; however, there is an annual minimum
payment of $600 and up to a 10-year repayment period, excluding
periods of deferment and forbearance. The interest rate is variable
and may change July 1 of each year, but it will never exceed
8.25 percent.

The U.S. Department of Education DOES NOT PAY the interest
on the loan for any period.

FEDERAL PLUS LOAN PROGRAM (FOR PARENTS)

PARENT APPLICATION METHOD
Parent obtains a loan application from a lender, school, or
guaranty agency.

Parent completes borrower's section, student completes student
section, and parent submits the application to the school.

ELIGIBILITY DETERMINATION
School reviews eligibility requirements and certifies school section
of loan application.

Parent cannot have an adverse credit history and remain eligible,
unless the lender determines that extenuating circumstances exist.
If parent does not pass a lender's credit check, he or she might be
able to receive a loan if he or she can obtain an endorser (someone
who agrees to co-sign the loan and promises to repay the loan if
the parent fails to do so).

AWARD DETERMINATION
School determines amount of PLUS loan on the basis of the
student's cost of attendance (COA), estimated financial assistance
(EFA), enrollment status, and length of enrollment.

AWARD AMOUNT
There is no annual award amount. However, the award cannot
exceed the COA minus EFA for the enrollment period.

DISBURSEMENT TO PARENT
Lender disburses the loan to the school by electronic funds
transfer (EFT), master check, or check made co-payable to the
parent and school.

School obtains parent's endorsement (if necessary) and either
credits the student's account for allowable charges owed the school
and delivers remaining proceeds to the parent OR releases the
check to the parent.

REPAYMENT
Repayment begins 60 days after the loan is fully disbursed, unless
deferment conditions apply. There is a minimum annual payment
of $600 and up to a 10-year repayment period. The interest rate is
variable and may change July 1 of each year, but it will never
exceed 9 percent.


WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

- Federal Direct Stafford/Ford Loan (Direct Subsidized Loan)
Program

- Federal Direct Unsubsidized Stafford/Ford Loan (Direct
Unsubsidized Loan) Program

- Federal Direct PLUS Loan (Direct Plus Loan) Program (for
parents)

FEDERAL DIRECT STAFFORD/FORD LOAN (DIRECT
SUBSIDIZED LOAN) PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

ELIGIBILITY DETERMINATION
School reviews and verifies the Institutional Student Information
Record (ISIR) or Student Aid Report (SAR) and other eligibility
requirements.

AWARD DETERMINATION
School determines amount of Direct Subsidized Loan on the basis
of the student's financial need, Expected Family Contribution
(EFC), cost of attendance (COA), estimated financial assistance
(EFA), enrollment status, length of enrollment, and defined
academic year. Award cannot exceed the COA minus EFC
minus EFA.

AWARD AMOUNT
Annual award maximums for undergraduate dependent students
are: first year $2625, second year $3,500, and third year and
beyond, $5,500 per academic year (cumulative amount is
$23,000).

Annual award maximum for a graduate or professional student is
$8,500 per academic year (cumulative amount for a graduate or
professional student, including undergraduate loan amount, is
$65,500).

All award amounts are less any amounts received under the
Federal Stafford Loan Program.

DISBURSEMENT TO STUDENT
School disburses directly to the student's account for allowable
charges owed the school and delivers the remaining proceeds to
the student. A school that does not have student accounts would
deliver the entire installment directly to the student. The school
issues a check or initiates an electronic funds transfer (EFT) to a
bank account designated by the student, OR dispenses cash for
which a school obtains a signed receipt from the student, OR
credits the student's account.

REPAYMENT
Repayment begins six months after the student graduates, leaves
school, or drops below half-time enrollment.

There are four repayment plans: Standard Repayment Plan,
Extended Repayment Plan, Graduated Repayment Plan, and
Income Contingent Repayment Plan. The monthly payment varies
on the basis of the plan selected by the borrower. Similarly, the
payment period can vary from 10 to 30 years on the basis of the
plan selected and the amount of the loan. The interest rate is
variable and may change July 1 of each year, but it will never
exceed 8.25 percent.

The U.S. Department of Education DOES NOT CHARGE interest
on the loan while the student is in school, during grace periods,
and during authorized periods of deferment.

FEDERAL DIRECT UNSUBSIDIZED STAFFORD/FORD LOAN
(DIRECT UNSUBSIDIZED LOAN) PROGRAM

STUDENT APPLICATION METHOD
Student submits the Free Application for Federal Student Aid
(FAFSA) to the U.S. Department of Education's Central
Processing System (CPS).

ELIGIBILITY DETERMINATION
School reviews and verifies the Institutional Student Information
Record (ISIR) or Student Aid Report (SAR) and other eligibility
requirements.

AWARD DETERMINATION
School determines amount of Direct Unsubsidized Loan on the
basis of cost of attendance (COA), estimated financial assistance
(EFA), enrollment status, length of enrollment, and defined
academic year. Award cannot exceed the COA minus EFA.

AWARD AMOUNT
Annual award maximums for undergraduate students are: first
year $2,625, second year $3,500, and third year and beyond,
$5,500 per academic year less the amount received in subsidized
loans (cumulative total is $23,000).

Additional unsubsidized loan amounts may be borrowed by
independent undergraduates and dependent undergraduates whose
parents are unable to obtain PLUS loans. In these cases, the
additional amounts that may be borrowed are: first year and
second year $4,000; third year and beyond, $5,000 per academic
year (cumulative amount is $23,000).

Annual award maximum for a graduate or professional student is
$18,500 (at least $10,000 of this amount must be in unsubsidized
loans) per academic year. (Cumulative amount for a graduate or
professional student, including undergraduate loan amount, is
$138,500.) All amounts are less any amounts received under the
Federal Stafford Loan Program.

DISBURSEMENT TO STUDENT
School disburses directly to the student's account for allowable
charges owed to the school and delivers the remaining proceeds to
the student. A school that doesn't use student accounts delivers all
proceeds directly to the student. The school issues a check or
initiates an electronic funds transfer (EFT) to a bank account
designated by the student; OR dispenses cash for which a school
obtains a signed receipt from the student; OR credits the student's
account.

REPAYMENT
Repayment begins six months after the student graduates, leaves
school, or drops below half-time enrollment. There are four
repayment plans: Standard Repayment Plan, Extended Repayment
Plan, Graduated Repayment Plan, and Income Contingent
Repayment Plan. The monthly payment varies on the basis of the
plan selected by the borrower. Similarly, the payment period can
vary from 10 to 30 years on the basis of the plan selected and the
amount of the loan. The interest rate is variable and will change
July 1 of each year, but it will never exceed 8.25 percent.

Interest on a Direct Unsubsidized Loan is charged throughout the
life of the loan--including while the student is in school, during
grace periods, and during authorized periods of deferment.

FEDERAL DIRECT PLUS LOAN (DIRECT PLUS LOAN)
PROGRAM (FOR PARENTS)

PARENT APPLICATION METHOD
Parent obtains a Direct PLUS Loan application from the school,
completes the application and promissory note, and submits the
application to the school.

ELIGIBILITY DETERMINATION
School reviews and verifies the Institutional Student Information
Record (ISIR) or Student Aid Report (SAR) and other eligibility
requirements.

Parent cannot have an adverse credit history and remain eligible. If
parent does not pass ED's credit check, he or she might be able to
receive a loan if he or she can obtain an endorser (someone who
agrees to co-sign the loan and promises to repay the loan if the
parents fail to do so) or if the parent can document to the
satisfaction of the U. S. Department of Education that extenuating
circumstances exist.

AWARD DETERMINATION
School determines amount of Direct PLUS Loan on the basis of
the student's cost of attendance (COA), estimated financial
assistance (EFA), enrollment status, and length of enrollment.

AWARD AMOUNT
There is no annual award amount. However, the award cannot
exceed the COA minus the student's EFA for the enrollment
period.

DISBURSEMENT TO PARENT
School disburses directly to the student's account for allowable
charges owed the school and delivers remaining proceeds to the
parent. The school issues a check or initiates an electronic funds
transfer (EFT) to a bank account designated by the parent. If the
school doesn't use student accounts, the parent can authorize the
student to receive excess proceeds.

REPAYMENT
Repayment begins on the day that the loan is fully disbursed,
unless a deferment applies and continues for up to a 10-year
repayment period. The interest rate may change July 1 of each
year, but it will never exceed 9 percent. There are three
repayment plans: Standard Repayment Plan, Extended Repayment
Plan, and Graduated Repayment Plan.

Last Modified: 06/30/1995