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May 15, 2015

bartnickiFederal Training Officer David Bartnicki recently shared these updates:

Direct Loan Entrance Counseling Requirements and Flexibilities

On April 6, 2015 ED posted a Dear Colleague Letter GEN-15-06 that discusses the statutory and regulatory requirements for entrance counseling as well as institutions’ flexibility to augment that counseling. The letter includes, in a Q&A format, information on loan counseling strategies that institutions can use to help ensure that students’ borrowing decisions are well-informed and carefully considered. The letter includes a reminder to institutions that, under the statute, they cannot deny or limit an otherwise eligible student’s access to Direct Loans, except by using “professional judgment.”

Two main premises stressed in the DCL are:

  • Once a first-time borrower has completed the required entrance counseling, either at the borrower’s current institution or at a previous institution, the borrower cannot be required to participate in any subsequent counseling as a condition of receiving a Direct Loan.
  • It is the borrower who makes the decision of whether to borrow and how much to borrow (up to the statutory annual and aggregate limits), not the institution, except an institution may, on a case-by-case basis, refuse to originate a Direct Loan or originate a loan for an amount that is less than what the borrower is eligible to receive.

Within the series of Q & As, the DCL indicates that for 1st-time borrowers required to go through entrance counseling, a school may add additional content, including tests, worksheets or presentations as long as the additional information or steps do not unreasonably impede the student from obtaining their loans in a timely manner. It also stresses that a school cannot require students who have submitted SAP appeals to participate in loan counseling beyond required entrance counseling for first-time borrowers.

We also stress that if you want to provide additional counseling activities to students who are not required to go through entrance counseling, it must be voluntary and cannot be used to delay the disbursement of Direct Loans.

For additional information regarding school flexibilities and requirements with regards to entrance counseling, please review Dear Colleague Letter GEN-15-06 – http://ifap.ed.gov/dpcletters/GEN1506.html.

Sequestration and TIV funds

On April 23, 2015, the Department posted a Dear Colleague Letter GEN-15-07 providing updated guidance on the FY 2016 sequester required changes to the Title IV Student Aid Programs.

The loan fee for Direct Subsidized Loans and Direct Unsubsidized Loans first disbursed on or after October 1, 2015 and before October 1, 2016 is 1.068% (down from 1.073%). The loan fee for Direct PLUS Loans (for both parent borrowers and graduate and professional student borrowers) first disbursed on or after October 1, 2015 and before October 1, 2016 is 4.272% (down from 4.292%)

An Iraq-Afghanistan Service Grant and a TEACH Grant where the first disbursement is on or after October 1, 2015 and before October 1, 2016 requires a reduction of 6.8% from the award amount for which the student would otherwise have been eligible (down for both grants from 7.3%).

For additional information and contact support, please see GEN-15-07 – http://ifap.ed.gov/dpcletters/GEN1507.html.

New Perkins Loan Assignment System (PLAS)

I am very excited to tell you that on April 22, 2015 ED released an electronic announcement announcing ED’s plan to develop an electronic Perkins Loan Assignment System which schools should be able to access by the fall of 2015 (http://ifap.ed.gov/eannouncements/042215ElectronProcOptionPerkinsAssignFall2015.html).

With the electronic Perkins Loan Assignment process, authenticated users will complete the Perkins Loan Assignment Form online using the new Perkins Loan Assignment System (PLAS). Users will be able to: complete a Web-based assignment form; submit multiple loans as a “batch file” or submit individual loans; securely upload supporting documentation (promissory notes, payment histories, etc.); search, view, and edit submitted loan assignment information; and view reports of Perkins Loans that have been accepted or rejected for assignment.

The electronic announcement also contains an attachment of the draft version of the batch file layout for the loan assignment process.

More information about PLAS will be provided in forthcoming communications, which will include details about system access, how to obtain a User ID and password, instructions for using PLAS, and instructions for completing the Web-based assignment form. Stay tuned to IFAP.

150% Direct Subsidized Loan Limit: School Misreporting of Data to COD and NSLDS

On April 20, 2015, ED posted an electronic announcement reminding schools to be careful when inputting program and academic year information into COD and NSLDS. We have determined that many schools are misreporting (1) academic year dates to the Common Origination and Disbursement (COD) System and (2) program length to both COD and to the National Student Loan Data System (NSLDS).

Remember that for standard term and some nonstandard term programs academic year dates reported should consist of multiple terms, even if the student receives the loan for only a single term. For non-term (and some non-standard-term) programs academic year dates reported should always be the length of a Title IV academic year, even if the student will be enrolled for or receiving a loan for a shorter period of time.

Schools should also carefully review program length data since we are finding some programs where the length appears to be obviously incorrect (4 year degree program reported as a 4 month program). Also remember that associate and bachelor degree programs should be reported in years.

For more detailed information and related guidance, please see the April 20, 2015 EA – http://ifap.ed.gov/eannouncements/042015DSLL150PerEA17SchoolMisreportDataCODandNSLDS.html.

Retirement

It seems every time I am writing a bulletin there is a new retirement to talk about.

I am happy, but personally sad, to see one of my closest colleagues preparing to retire in a few weeks – Laura Hall. Many of you may have interacted with Laura at some point over the last few years as the Institutional Improvement Specialist with the Atlanta School Participation Team. Laura has worked closely with many new schools in the region and has been involved with many complex compliance and technical assistance issues over the years.

Laura is set to officially retire in early June 2015. We wish her all the best and hope she stops dreaming about TIV aid.

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