By Heather Ostrowski
The Federal Student Aid Handbook was recently issued for the 2014-2015 award year. As with every new edition of the Handbook, the Department of Education (ED) has outlined all of the updates that financial aid professionals should be aware of for the current award year.
Here are some of the updates (in case you missed them):
- From Volume 2:Certain states have supplemented or even replaced the GED test with either the High School Equivalency Test (“HiSET”) or the Test Assessing Secondary Completion (“TASC”). Be sure to check if your state recognizes these tests as the equivalent of a high school diploma. (Chapter 1, page 8) (DCL: GEN-14-06)Schools will no longer receive both two-year and three-year cohort default rates. All rates going forward will be reflecting a three-year rate. This rate is calculated by taking the total number of borrowers at an institution in one fiscal year (e.g., FY 2011) who subsequently defaulted in fiscal year 2011, 2012 or 2013, divided by the total borrowers who entered repayment in fiscal year 2011. (Chapter 4, pages 78-81)
- From Volume 3:Guidance on the limitations for the tuition and fees component of a program’s cost of attendance (“COA”) was expanded. Offering a tuition discount to students who pay early is not permitted because Title IV recipients may not be able to, and should not be required to, meet that requirement. (Chapter 2, page 38)
A school may not use Title IV funds to pay overtime charges for a student who fails to complete the academic program within the normal time frame. (Chapter 2, pages 38-39)
Title IV funds may not be used to pay finance charges or fees that are incurred because a student utilizes a financing method provided by the school to pay for educational expenses over time. These charges are not educational expenses. (Chapter 2, page 39)
- From Volume 4:A student who received subsidized loan funds in excess of the applicable subsidized annual or aggregate loan limit can no longer regain Title IV eligibility by having the excess subsidized loan amount changed to an unsubsidized loan. (Chapter 3, page 69) (DCL: GEN-13-02)
FSA will no longer accept Direct Loan refunds of cash sent manually as of January 1, 2015. (Chapter 4, page 82)
- From Volume 5:A school may not include as Aid That Could Have Been Disbursed (“ATCHBD”) Pell Grant funds that would cause the student to exceed the Pell Grant lifetime eligibility. Likewise, a school may not include as ATCHBD Direct Subsidized Loan funds that would cause a student to exceed the 150% maximum eligibility period for Direct Subsidized loans. (Chapter 1, page 27)
- The Application & Verification Guide describes the new Verification Group V6 as well as the removal of Verification Group V2. Guidance on FASFA completion for dependent students with “modern families” has also been added because of the implications of the Defense of Marriage Act decision.
Again, these are just some of the changes that occurred in the new Handbook. As always, if you have questions or would like clarification on any of these items or other items related to Title IV regulations, feel free to contact us.
Volume 1, Issue 4