| 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. |