SEQUESTER CHANGES TITLE IV STUDENT AID PROGRAMS IN FY 19

Beginning on October 1, 2018 origination fees on Direct Loans including Direct PLUS Loans, are going up. Iraq-Afghanistan Service Grants (IASG) and TEACH Grants are also being reduced. These changes will apply to all loans, IASG and TEACH Grants where a first disbursement is made on or after October 1.

The origination fees have been changing every October 1st because of the Budget Control Act of 2011, known as the sequester law. For Federal Fiscal Year 19 (October 1, 2018 – September 30, 2019):

The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans is 1.062%. For example, the fee on a $5,500 loan will be $58.41.

The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) is 4.248%. For example, the fee on a $10,000 PLUS Loan will be $424.80.

An Iraq-Afghanistan Service Grant where the first disbursement is on or after October 1, 2018 and before October 1, 2019 requires a reduction of 6.2 percent from the award amount for which the student would otherwise have been eligible.

A TEACH Grant where the first disbursement is on or after October 1, 2018 and before October 1, 2019 requires a reduction of 6.2 percent from the award amount for which the student would otherwise have been eligible.

For more information about the sequester changes see this electronic announcement from FSA.