JULY 2013 NEWSLETTER

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1 W Kellogg Drive Wichita, KS IMPORTANT DATES: July 3 DJA Monthly Webinar Campus Crime Report 11:00 a.m. CDT July 4 and 5 DJA Closed for Independence Day July 31 Direct Loan Close-Out Deadline August 7 DJA Monthly Webinar Entrance & Exit Counseling 11:00 a.m. CDT September 17 Constitution Day IN THIS ISSUE: Interest Rates Double 150% Direct Loan Limit Loan Origination Fee Increase LEU Dispute Escalation Process DOMA Impact New FSA Training Calendar JULY 2013 NEWSLETTER The Senate adjourned for the Fourth of July recess on Thursday, but failed to keep interest rates on Stafford loans at the current 3.4 percent rate. The current rates on federally subsidized loans are set to expire on July 1, after which the interest rate cap will rise to 6.8 percent. In order to keep interest rates down, lawmakers would have to extend the cap, set a new one, or find another way to keep rates low. Senate Democrats on Thursday advocated for a temporary one-year delay of the current Stafford loan rates, but Republicans opposed the idea, and the Senate adjourned for recess. Lawmakers are planning to consider a retroactive fix on July 10 th. DJA will be closed Thursday, July 4 th & Friday, July 5 th Independence Day. I wish you a relaxing and safe holiday! Deborah John, President 150% DIRECT SUBSIDIZED LOAN LIMIT - PHASE ONE OF COD SYSTEM CHANGES to celebrate On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Public Law ) was enacted. MAP-21 added a new provision to the Direct Loan statutory requirements (see HEA section 455(q)) that limits a first-time borrower s eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower s educational program. Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150 percent limit to lose the interest subsidy on their Direct Subsidized Loans. During the period June 28-30, 2013, the following COD System changes were implemented. These changes will identify for schools first-time borrowers who are subject to the 150% limit. This information will also help schools provide those borrowers with the entrance counseling that is required under the interim final regulations. Subsidized Usage Limit Applies (SULA) - This field will be added to the COD System. The SULA field will allow schools to identify a first-time borrower who

2 July has no outstanding loan balance on Federal Family Education Loan (FFEL) Program or Direct Loan Program loans at the time he or she receives a Direct Subsidized Loan or Direct Unsubsidized Loan on or after July 1, Note: Although the receipt of a Direct PLUS Loan can also make a student or parent a first-time borrower, the student or parent will not be identified as a first-time borrower unless the student or parent receives a Direct Subsidized Loan or Direct Unsubsidized Loan. New Warning Edit A new COD Warning edit to notify schools of first-time borrowers who are subject to the 150% limit will be added. COD Warning Edit 200 will be returned at the person level on any award once the SULA field is populated. COD Warning Edit 200 will be returned with the message 150% Subsidized Usage Limit Applies to borrower. New System Report A new report will also be created for schools. The Web-only report will be automatically posted weekly to a school s COD Reporting Newsbox. It will not be sent via the Student Aid Internet Gateway (SAIG) and will not be available for a school to request on an ad-hoc basis. The report will list all borrowers who are subject to the 150% limit. A borrower s name will appear only once per school per Direct Loan processing year and will remain on the report for 45 days. If there are no first-time borrowers identified during the reporting period, the school will not receive a report for that week. Information about the second phase of system changes to the COD System, the NSLDS, and the CPS will be posted in future communications as the requirements are finalized for those changes. Please click on this link for more information: LOAN ORIGINATION FEE PERCENTAGE INCREASE As a result of sequestration, the USDE has established new origination fees for federal student loans. The increased origination fee percentages, percent for Direct Subsidized and Direct Unsubsidized Loans and percent for Direct PLUS Loans, must be applied to any loan disbursement for a loan where the first disbursement of the loan will be made on or after July 1, Beginning June 30, 2013, the COD System will begin to accept Direct Loan records with the increased origination fee percentages. Loans submitted with a first disbursement date on or after July 1, 2013 must be reduced to zero and resubmitted using the higher loan fees. The new origination fees can be found below. Loan Type Origination Fees (as a percentage of overall loan value) On or before March 1, 2013 After March 1, 2013 Direct Stafford 1.00% 1.051% PLUS 4.00% 4.204%

3 July The chart below reflects the change in dollar cost for selected loan values. Loan Type Loan Value Origination fees On or before March 1, 2013 After March 1, 2013 Direct Stafford $5,500 $55 $57.81 Direct Stafford $20,500 $205 $ Direct Stafford $40,500 $405 $ PLUS $20,000 $800 $ Additional COD System Processing Function Enhancements and Modifications for in PDF Format, 246KB, 4 Pages PELL GRANT LIFETIME ELIGIBILITY USED - DISPUTE ESCALATION PROCESS In an electronic announcement posted to the IFAP website on June 27, USDE provides guidance regarding the process a school may take to dispute a student s Federal Pell Grant LEU, as reported in the Common Origination and Disbursement (COD) System. In some cases, a school or student may dispute the accuracy of the student s COD Pell Grant information that resulted in the reported LEU. To address these cases, a dispute escalation process has been developed to allow a school to submit information to USDE for an evaluation of a student s Pell Grant LEU. Note: Because a school has NSLDS and COD access to its students historical Pell Grant data, including information on Pell Grant funds received by the student for attendance at other schools, the student s current school is expected to coordinate with other schools, if applicable, about the Pell Grant LEU dispute. In an attachment to this announcement, detailed information is provided about the steps to be taken by the student, the school(s), and the Department when there is a Pell Grant LEU dispute. Note: If resolution of the disputed Pell Grant amount would not reduce the student s LEU to be less than 600%, the school should not escalate the matter. For example, if a student s Pell Grant LEU is 850% and she is disputing one award year s eligibility used of 100%, the school should explain to the student that even if the disputed amount is resolved in the student s favor, she would remain ineligible for additional Pell Grant funding because her adjusted Pell Grant LEU of 750% would still be over the 600% statutory limit. As a reminder, the reporting timeframe for disbursements that occur on or after April 1, 2013 has been changed from 30 days to 15 days. To ensure the most accurate information about each student s Pell Grant LEU, schools to report Pell Grant disbursements and adjustments within the new 15 day requirement. Please reference Federal Register notice published February 28, 2013 and the August 13, 2012 Electronic Announcement for more information on the importance of timely reporting.

4 July Pell Grant LEU Dispute Escalation Process in PDF Format, 244KB, 5 Pages DEFENSE OF MARRIAGE ACT RULING IMPACT ON FEDERAL STUDENT AID The Supreme Court's ruling on June 26, 2013 struck down the federal Defense of Marriage Act (DOMA) of Under DOMA, applicants with married same-sex parents were instructed to treat their parents as if they were divorced, and were therefore permitted only to list the contributions and income of one parent on the FAFSA. Likewise, applicants with same-sex spouses were informed that their marriage was not recognized by the federal government and were not permitted to list their spouse on the application. Now that DOMA has been declared unconstitutional, applicants with same-sex married parents will be required to list the incomes and contributions of both of their parents, and applicants with same-sex spouses will be required to list their spouse as part of their household. Including same-sex spouses' income in the federal needanalysis formula could reduce some students' eligibility for aid, but counting spouses and all of a couple's children in the household could increase it. Prior to the Supreme Court s ruling on DOMA, the Department of Education announced an update to the 2014/2015 FAFSA that requires all applicants to list both of their legal parents regardless of marital status and gender, provided they live together. That change could reduce aid to some dependent children of same-sex couples because a second parent's income and assets will be included in the formula. The Supreme Court s ruling applies only to the federal government. It does not change state laws excluding same-sex couples from state-conferred marriage rights. Students married in states that ban same-sex marriage will not benefit from the court s decision. The ruling will not be effective until 25 days from the decision, however, even when effective; it will take some time and work to change forms, implement procedures, and incorporate same-sex couples into the system. USDE will provide guidance about the impact once they have had a chance to review the Court s decision. THE NEW FEDERAL STUDENT AID E-TRAINING WEB SITE Dear Colleague Letter ANN announces the launch of the Department of Education's (the Department's) Federal Student Aid E-Training Web site, a new training resource for the financial aid community. Federal Student Aid E-Training, located at is a Web-based training delivery platform providing a variety of training services, including interactive online courses and access to archived training modules. In the future, Federal Student Aid E-Training will host live webinars and provide a registration system for other instructor-led training events sponsored by the Department. FSA recommends first-time users of the site go to and take the virtual tour, a link to which is located in the left-hand column on the home page. The brief, three-minute video highlights the site's main menu bars and provides helpful navigation tips.

5 July The current library of online training available includes four introductory training videos under the menu item Intro to Federal Student Aid. Seven general student eligibility modules are also available under the menu item Training by Topics. The training courses are self-paced and are generally offered in short, 8-20 minute training segments. You are encouraged to take the virtual tour, create a user account, and explore the training resources available on Federal Student Aid E-Training. DJA CALENDAR & EXHIBITION SCHEDULE Monthly DJA Webinar: Campus Crime Report Wednesday, July 3rd at 11a.m. CDT Next Month DJA Webinar: Entrance & Exit Counseling Wednesday Aug. 7th at 11 a.m. CDT NOTE: There may be a difference between DJA local time and your time zone. To determine your time zone equivalent, click on this link to view a time zone map: Webinars are free so please join us for these presentations. All participants for these sessions must register by sending an to Julie Kerr at jkerr@gotodja.com. After registering, you will receive the log-in information. Questions can be directed to Julie by or by calling toll free IMPORTANT REMINDER: DJA will be closed July 4 th & 5 th The California Association of Private Postsecondary Schools (CAPPS) 29 th Annual Conference October 9-11 in Pasadena, CA DJA will be an exhibitor at CAPPS. CAPPS is the only California State Association representing the many diverse kinds of Private Postsecondary Schools in California. CAPPS has a membership of over three hundred institutions including for-profit, non-profit, religious exempt and approved only Institutions. For additional information about this conference, visit the CAPPS website at or call CAPPS at American Association of Cosmetology Schools (AACS) Annual Convention November in Las Vegas, NV AACS is a national nonprofit association open to all privately owned schools of Cosmetology. This year s Convention will be held in Las Vegas, Nevada at Bally s Hotel and Casino. DJA will be a presenter at this convention. For additional information about this conference visit the AACS website at