PublicationDate: 7/1/95 ChapterNumber: 1 ChapterTitle: Student Financial Aid Programs SectionNumber: 4 SectionTitle: Other Title IV Programs PageNumbers: 10-13 1.4 Other Title IV Programs Title IV programs that are not campus-based programs consist of the Federal Pell Grant Program, the William D. Ford Federal Direct Loan Program, and the Federal Family Education Loan (FFEL) Program. The State Student Incentive Grant (SSIG) Program, the Robert C. Byrd Honors Scholarship Program, and the Presidential Access Scholarship (PAS) Program are also authorized under Title IV of the HEA and are included here for the sake of completeness. However, this book will not address them from the perspective of fiscal operations, as the Byrd Scholarship and SSIG Programs are state- administered, and the PAS Program is not currently funded by Congress. With the exception of the Byrd Scholarship, all of these non-campus- based Title IV programs require students to file a FAFSA or Renewal FAFSA annually. 1.4.1 Federal Pell Grant Program Federal Pell Grants are available to eligible undergraduate students who have not yet received bachelor's degrees or professional degrees, are enrolled in degree or certificate programs, and meet program eligibility requirements. Eligibility is also determined on the basis of financial need. A student's Expected Family Contribution (EFC) is used in determining need. The EFC, along with a student's enrollment status and the length of his or her program of study, determine the amount of the student's award. Funds an eligible student receives from this program do not have to be repaid. (See Chapter 4 of The 1995-96 Federal Student Financial Aid Handbook and 34 CFR Part 690.) 1.4.2 William D. Ford Federal Direct Loan Program The William D. Ford Federal Direct Loan Program consists of Direct Subsidized Stafford/Ford Loans (Direct Subsidized Loans), Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans), Direct PLUS Loans (Direct PLUS Loans), and Direct Consolidation Loans. Direct Loans are made by the federal government to eligible undergraduate and graduate students and their parents through financial aid offices at participating schools. A student must be enrolled at least half time to be eligible for a loan. (See 34 CFR Part 685.) Direct Subsidized Loans and Direct Unsubsidized Loans are made to eligible students enrolled in eligible programs of study, and Direct PLUS Loans are made to eligible parents of dependent undergraduate students who are enrolled in eligible programs of study. Borrowers are not charged interest on Direct Subsidized Loans during certain periods, such as when they are enrolled at least half time and during grace and deferment periods. Borrowers ARE charged interest on Direct Unsubsidized Loans and Direct PLUS Loans throughout the lives of the loans. ED's Direct Loan Servicing Center services all Direct Loans and collects payments from borrowers. ((Interest subsidy)) Because the federal government subsidizes the interest on students' Direct Subsidized Loans, students must show financial need to qualify for these loans. The loan amount is determined by the student's cost of attendance (COA), EFC, and the amount of other aid the student is receiving. Eligibility for Direct Unsubsidized Loans and Direct PLUS Loans is not determined on the basis of financial need. All or a portion of a Direct Unsubsidized Loan or Direct PLUS Loan may replace a student's EFC. ((Direct Consolidation Loan)) A Federal Direct Consolidation Loan is designed to help student and parent borrowers simplify loan repayment by consolidating their federal student loans and making one payment each month. In addition, even one loan may be consolidated into a Federal Direct Consolidation Loan. This program offers more expanded repayment options and may offer lower interest rates and more deferment possibilities than other federal student loans. There are three types of Direct Consolidation Loans: subsidized, unsubsidized, and PLUS. 1.4.3 Federal Family Education Loan (FFEL) Program The FFEL Program consists of subsidized and unsubsidized Federal Stafford Loans, Federal PLUS Loans, and FFEL Consolidation Loans; they are made by participating lending institutions, such as banks, credit unions, and the like. These loans are guaranteed by state or regional guaranty agencies and underwritten by the federal government. These loans are made to eligible undergraduate and graduate students or, in the case of Federal PLUS Loans, to the eligible parents of dependent undergraduate students who are enrolled at least half time in eligible programs. Federal Stafford Loans are made to eligible students who are enrolled at least half time in eligible programs of study. The federal government pays the interest on subsidized Federal Stafford Loans during certain periods, such as when a borrower is enrolled in school, during a deferment, and during a borrower's grace period preceding repayment. A borrower is responsible for paying all interest on an unsubsidized Federal Stafford Loan or a Federal PLUS Loan. A borrower makes payments to his or her lender (or to a servicing agent employed by the lender), unless the lender sells the borrower's loan to a secondary market. Then the secondary market becomes the holder of the loan and the borrower makes his or her payments to the new loan holder. ((Interest subsidy)) Because the federal government subsidizes the interest on Federal Stafford Loans, students must show financial need to qualify for these loans. The loan amount is determined by the student's cost of attendance (COA), EFC, and the amount of other aid the student is receiving. (See Chapter 10 of The 1995-96 Federal Student Financial Aid Handbook and 34 CFR Part 682.) Eligibility for unsubsidized Federal Stafford Loans and Federal PLUS Loans is not determined on the basis of need and can replace the EFC. ((FFEL Consolidation Loan)) A FFEL Consolidation Loan is designed to help student and parent borrowers consolidate several types of federal student loans with various repayment schedules into one loan. Borrowers make only one payment a month, and the interest rate may be lower than other federal student loans. There are two types of FFEL Consolidation Loans: subsidized and unsubsidized. 1.4.4 State Student Incentive Grant (SSIG) Program The SSIG Program assists states in providing grants to eligible students who attend postsecondary schools and who have financial need. Each state receives an annual allocation of federal SSIG funds that must be matched with a certain amount of state funds. The name of the program, amount of funds available, application procedures, and other aspects of the SSIG Program may vary from state to state. For specific information about the SSIG Program in your state, contact your state education agency. (See Chapter 9 of The 1995-96 Federal Student Financial Aid Handbook and 34 CFR Part 692.) 1.4.5 Robert C. Byrd Honors Scholarship Program This program provides federal grants to states so that scholarships may be made to exceptionally able students for postsecondary study. The purpose of the program is to promote academic excellence and achievement. Each state establishes its own application procedures for the Byrd Scholarship. For specific information about how the Byrd Scholarship Program is administered in your state, contact your state education agency. 1.4.6 Presidential Access Scholarship (PAS) Program The PAS Program is designed to encourage students from low- income and moderate-income families to upgrade their high school course of study, graduate from high school, and attend college. Although the PAS Program is authorized under Title IV of the HEA, no funding has been allocated by Congress for the program. |