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

Student Financial Aid Programs

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.

Last Modified: 06/30/1995