Recent Changes to SFA Programs
Here's an overview of the changes that will impact your financial aid for the 2013-14
school year (July 1, 2013 through June 30, 2014) and in the future.
Eligibility of Students Without a High School Diploma
If you enroll in higher education for the first time on or after July 1, 2012, in
order to be eligible for federal student aid, you must have either a high school diploma
or a recognized equivalent (such as a General Educational Development certificate
(GED) or have been home schooled).
- You no longer have the option of becoming eligible for federal student aid by passing
an approved test or completing at least six credit hours or 225 clock hours of postsecondary
education. For more information, see the basic eligibility requirements for federal student aid.
Expected Family Contribution
The lower a student's Expected Family Contribution (EFC), the higher the student's
federal student aid eligibility. A change has been made to the income amount that
is used to determine if a student qualifies for an automatic EFC of zero.
- When you complete the Free Application for Federal Student Aid (FAFSA) , you receive an Expected Family Contribution, which is a number used to determine
your federal student aid eligibility. For the 2013-14 school year, you automatically
qualify for an Expected Family Contribution of zero if your family income does not
exceed $24,000. This is an increase from the previous maximum income of $23,000.
Federal Pell Grant Program - Duration of Eligibility
Once you have received a Pell Grant for 12 semesters (full-time), or the equivalent, you are no longer eligible for additional
- You are eligible to receive a Pell Grant for up to 12 semesters or the equivalent.
If you have exceeded the 12-semester maximum, you lose eligibility for additional
Pell Grants. Equivalency is calculated by adding together the percentage of your Pell
eligibility that you received each year to determine whether the total amount exceeds
- For example, if your maximum Pell Grant award amount for the 2011-2012 school year
was $5,550, but you only receive $2,775 because you were only enrolled for one semester,
you would have used 50% of your maximum award for that year. If in the following school
year, you were enrolled only three-quarter time, you would have used 75% of your maximum
award for that year. Together, you would have received 125% out of the total 600%
- Learn more about the Pell Grant limit.
Direct Student Loan Changes
Direct Subsidized Loans are not eligible for an interest subsidy during the six-month grace period.*
- Subsidized loans are loans for which the borrower is not responsible for the interest
while the student is enrolled in college on at least a half-time basis, when the loan
is in the six-month grace period after the student is no longer enrolled at least
half time, or if the loan is in a deferment status.
- *This provision eliminates the interest subsidy provided during the six-month grace
period for subsidized loans for which the first disbursement is made on or after July
1, 2012, and before July 1, 2014. If you receive a subsidized loan during this timeframe,
you are responsible for the interest that accrues while your loan is in the grace
period. You do not have to make payments during the grace period (unless you choose
to) but the interest will be added (capitalized) to the principal amount of your loan
when the grace period ends. This provision does not eliminate the interest subsidy
while the borrower is in school or during eligible periods of deferment.
Subsidized loans made to undergraduate students.
- Subsidized loans for which the first disbursement is made on or after July 1, 2012,
and before July 1, 2013 have a 3.4% fixed interest rate.
- Absent legislative action, interest rates are scheduled to double to 6.8 percent,
effective July 1,2013.
- The implementation of sequestration, effective March 1, 2013, has increased Direct Subsidized and Direct Unsubsidized
Loan fees to 1.051 percent and Direct Plus Loan fees to 4.204 percent.
Graduate and professional students are no longer eligible to receive subsidized loans.
- Effective for loans made for payment periods that begin on or after July 1, 2012,
graduate and professional students are no longer eligible to receive subsidized loans.
However, if you are a graduate or professional student, you may still qualify for
up to $20,500 in unsubsidized loans each year.
The U.S. Department of Education can no longer offer borrowers repayment incentives.
- Effective for loans first disbursed on or after July 1, 2012, the Department of Education
is prohibited from offering any repayment incentives to Direct Loan borrowers, except
interest rate reductions to borrowers who agree to have payments automatically electronically
debited from their bank account).
Effective as of July 1, 2013, the Direct Loan interest subsidy will be limited for new borrowers.
- The new limitation impacts only new borrowers -defined as a student with no outstanding
Direct Loan balance as of 7-1-2013.
- The law restricts the period of time for which a new borrower may receive subsidized
loans, in the aggregate, to 150 percent of the published length of the student's current
- Once a student reaches that limit, he or she can only borrow an unsubsidized loan,
and interest begins to accrue on the student's outstanding subsidized loans.
- While new borrowers will not see the effect of the subsidy limit until a minimum of
150 percent of his or her published program length has elapsed, it is important to
understand that academic progress will be tied to the cost of borrowing student loans.