Federal Student Aid will be contacting TEACH Grant recipients whose TEACH Grants were converted into Direct Unsubsidized Loans to redetermine if they met or are meeting the TEACH Grant Service Requirements, but had their grants converted into loans because they did not comply with the annual certification requirements. According to an announcement from FSA, individuals may qualify to have their loans converted back to TEACH Grants if they can demonstrate that they completed at least four years of qualifying teaching or are expecting to or are in the process of doing so.
The TEACH Grant Closeout Deadline for the 2017-2018 award year is Friday September 28, 2018. As with all other federal aid programs, schools participating in the Teach Grant program must submit all school data to COD by the deadline. To be successfully closed out, schools should reconcile to a zero-ending cash balance between its monthly TEACH Grant School Account Statement and its internal records to avoid being billed for remaining balances owed to the Department of Education.
Schools participating in the TEACH Grant program can officially confirm closeout via the School Balance Confirmation page on the COD Web Site for the 2017-18 Award Year. Once a school officially confirms closeout for TEACH Grant, the Department will take the following actions:
The Department will send a Program Year Closeout letter to the school’s President and Financial Aid Administrator. The letter will be sent via email. Note: Schools will also be able to view a copy of the letter on the “School Correspondence” page via the COD Web Site. If the school confirms closeout and does not receive a letter, please check to make sure the school’s contact information is correct on the “Financial Aid Contact” page via the COD Web Site and that the school’s system is not blocking emails from (DoNotReply@cod.ed.gov).
The COD System will reject award or disbursement changes per published edits.
The Department will reduce the school’s Current Funding Level (CFL) to the greater of Net Drawdowns or Net Accepted & Posted Disbursements.
The TEACH SAS will no longer be sent for the award year that is closed out.
Schools that complete this closeout confirmation process should save a copy of the Program Year Closeout letter with their final reconciliation documentation, to document the date the school officially confirmed closeout for the award year. No additional monthly reconciliation is required, unless the school is subsequently reopened, granted extended processing, or the school’s ending cash balance changes, in which case an additional TEACH SAS will be generated and sent to the school for final reconciliation.
For more information, click here.
The Budget Control Act of 2011 was signed into law by President Barrack Obama to stop the federal government from going into default during the debt-ceiling crisis of 2011. Since then, every October 1st when the federal government begins its fiscal year, automatic spending cuts are imposed on federal appropriations to ensure that spending doesn’t exceed certain thresholds. This is known as “sequestration” or “the sequester” and it’s how the government has been keeping the federal budget in check. In the financial aid office, the sequester requires changes to Direct Loan fees, as well as Iraq-Afghanistan Service Grants and TEACH Grants which I’ve summarized for you below.
Direct Loan Program
The terms of the sequester increase the loan fees charged to Direct Loan borrowers for Direct Subsidized/Direct Unsubsidized and Direct PLUS loans from their statutory rates of 1 percent and 4 percent, respectively.
For loans where the first disbursement is made on or after October 1, 2017 and before October 1, 2018 –
• The loan fee for Direct Subsidized Loans and for Direct Unsubsidized Loans is 1.066%. For example, the fee on a $5,500 loan will be $58.63.
• The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) is 4.264%. For example, the fee on a $10,000 PLUS Loan will be $426.40.
Iraq-Afghanistan Service Grants
An Iraq-Afghanistan Service Grant where the first disbursement is on or after October 1, 2017 and before October 1, 2018 requires a reduction of 6.6 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, 2017 and before October 1, 2018 requires a reduction of 6.6 percent from the award amount for which the student would otherwise have been eligible.