SULA – Interest Subsidy – New Q & A Part 4

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.

You can read these and other 150% Direct Subsidized Loan Limit – Frequently Asked Questions on the Departments FAQ Page Here: http://bit.ly/2mZ95gW

Interest Subsidy 

INT-Q6: If a student loses interest subsidy, but subsequently regains eligibility for Direct Subsidized Loans by enrolling in a longer program, will the student regain interest subsidy?  

INT-A6: Not on the loans that had lost interest subsidy. Once a loan loses interest subsidy, it does so permanently. However, if otherwise eligible, the student may receive additional Direct Subsidized Loans. 

For example, consider a student who was enrolled in a 4-year bachelor’s degree program and had a subsidized usage period of 3 years, withdraws from the 4-year program, and then enrolls in a 1-year undergraduate certificate program. The student is not only ineligible for Direct Subsidized Loans in the 1-year program, but also loses interest subsidy on all of the outstanding Direct Subsidized Loans taken for attendance in the 4-year program. If this student later re-enrolls in the same or another 4-year program, the student may borrow subsidized loans for up to 3 more years.  However, the loans from the first 3 years of study in the 4-year program do not regain interest subsidy. Any additional loans borrowed upon re-enrollment in the 4-year program will have interest subsidy unless the student’s enrollment again triggers the loss of interest subsidy.  

INT-Q7: Is there a way for a school to determine when a student lost interest subsidy on a Direct Subsidized Loan?  

INT-A7: Yes. On the National Student Loan Data System’s Professional Access site, schools may view the date that the student’s loans lost subsidy by navigating to the enrollment tab and then selecting the subsidized usage button. 

 

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. 

 

SULA –  Remaining Eligibility Period – New Q & A Part 2

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.

Remaining Eligibility Period

REP-Q5: A school has a policy of automatically awarding only Direct Unsubsidized Loans to a student who has as remaining eligibility period of less than 0.5 years. Is this acceptable?

 REP-A5: No. A student with a remaining eligibility period of 0.5 years or less may be able to receive a Direct Subsidized Loan and must be considered for the loan.

 At standard-term-based schools, a single-term loan would often have a Subsidized Usage Period of less than 0.5 years. Moreover, factors such as enrollment status also play a role in calculating Subsidized Usage Periods. Please see 150% Electronic Announcement  #20 for more information and the subsidized usage calculator on the Common Origination and Disbursement (COD) System’s website, which can assist schools which are attempting to ascertain whether COD would accept a loan record based on the 150% limit.

SULA –  Subsidized Usage Period – New Q & A Part 1

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.

 Subsidized Usage Period

SUP-Q16: A school cancelled all disbursements of a Direct Subsidized Loan by reducing the disbursement amounts to zero. However, the Common Origination and Disbursement (COD) System is still calculating a subsidized usage period. Why?

SUP-A16: To completely eliminate a subsidized usage period on a Direct Subsidized Loan, schools must fully inactivate the loan by reducing the award amount to zero, not just the disbursement amount to zero.

 

SULA CHANGES ON COD INCREASE NSLDS POSTSCREENING

In the last few weeks schools have seen an increased volume of Subsidized Usage changes on postscreened ISIRS resulting from recent changes to COD for 150% Direct Subsidized Loan Limit determinations. In the end of October, FSA recalculated Subsidized Usage for existing subsidized loans. The recalculation and new COD calculations trigger NSLDS Postscreening and in turn, system generated ISIR and SAR data whenever there is a change in the student’s SULA Eligibility results. Many schools have already reviewed borrower eligibility using the System generated SULA Calculation response files that were sent to schools during the last week of October, however those who haven’t should pay close attention to any system generated  ISIRs they receive in the coming weeks because they may impact student eligibility for Direct Subsidized Loans due to the changes. Be on the lookout for ISIRS with NSLDS Post Screening Reason Code 27 and ISIR SAR Comment 004 and double check your SULA determinations. http://bit.ly/2gDOpUQ