SULA –  Loss of Eligibilty- New Q & A Part 3

SULA DIRECT SUBSIDIZED LOAN LIMIT FREQUENTLY ASKED QUESTIONS UPDATE

Understanding the requirements for calculating awards under SULA can be as brain-racking as the calculations themselves. Fortunately, ED provides fairly regular updates to its 150% Direct Subsidized Loan Limit Frequently Asked Questions. In March, ED provided guidance on a several topics which I’ve summarized for you below.

Loss of Eligibility 

ELIG-Q2: The Common Origination and Disbursement (COD) System rejected a Direct Subsidized Loan record because it would have caused the student’s remaining eligibility period to be less than zero (edit 206). However, the student’s current remaining eligibility period is greater than zero. Can the loan be reconfigured so that the COD System will accept the record? 

ELIG-A2: Maybe. If the school can either properly make the loan for a shorter period of time or, in some circumstances, if the school can reduce the amount of the loan, COD may accept it. Please see 150% Electronic Announcement #20 for more information.  

ELIG-Q3: The Common Origination and Disbursement (COD) System rejected a Direct Subsidized Loan record because it would have caused a student’s remaining eligibility period to be less than zero (edit 206). However, the student’s current remaining eligibility period is greater than zero. Should the school simply prorate the loan amount by the student’s remaining eligibility period?  

ELIG-A3: No. Generally, the 150% limit calculates a student’s eligibility based on the period of time for which a student is receiving a Direct Subsidized Loan, not the amount of that loan. While the amount of the loan will matter in some circumstances, simply prorating the loan amount by the amount of the student’s remaining eligibility period is improper. Please see 150% Electronic Announcement #20 for more information.    

ELIG-Q4: A student transferred from one school to another school. The new school finds that the other school misreported loan information that is affecting the student’s eligibility for Direct Subsidized Loans at the new school. What should the new school do?  

ELIG-A4: The new school should contact the former school to request that the loan information be corrected. If the former school is unresponsive or closed, the new school should submit a Subsidized Usage Inquiry on the Common Origination and Disbursement (COD) System’s website.