Borrow Based Loans vs. Academic Year Loans Suzie Petersen Assistant Director of Financial Aid Oregon Institute of Technology

Period of enrollment (loan period) 34 CFR (b) The period of enrollment for which a Direct Loan is intended must coincide with an academic period established by the school for which institutional charges are generally assessed (e.g., semester, trimester, quarter, length of the student’s program, or academic year). The period of enrollment is also referred to as the loan period. Determine the Loan Periods for your students

Scheduled Academic Year (SAY) or Borrower-Based Academic Year (BBAY)  A school must use either a Scheduled Academic Year or a Borrower-Based Academic year when awarding Direct Loans, schools can choose to use both depending on their student population  A SAY begins and ends at the same time each year  A BBAY floats with the student’s enrollment

SAY Loan Periods  SAY Loan Periods correspond to a traditional academic year calendar and the loan periods have fixed dates  Most academic year calendars are either term or semester based, so for a term based school the SAY will include Summer, Fall, Winter, and Spring  Summer term will either be considered the header or trailer and will be different from school to school

Example of SAY Academic Year Summer is the Header for School A, loan period dates will be as follows:  Academic Year Start/End is June 22, 2015 through June 10, 2016  Student is enrolled for Summer, Fall, Winter, and Spring, thus receiving 4 disbursements for the academic year and using all of their eligibility of $12,500 as a Senior  Student is enrolled for Fall, Winter, and Spring, thus receiving 3 disbursements for the academic year and using all of their eligibility of $12,500 as a Senior

Example of a BBAY  Student starts their enrollment in Summer term  Student’s loan period #1 starts for Summer term and ends Winter term, using all of their eligibility of $12,500 as a Senior  Student starts loan period #2 Spring term and now loan period is now Spring, Summer, Fall, using all of their eligibility of $12,500 as a Senior  Student starts loan period #3 Winter and now loan period is Winter, Spring, Summer, using all of their eligibility of $12,500 as a Senior

Choice or SAY or BBAY??  A school can choose to use BBAY for all students or they can use a mixture of BBAY and SAY for their students  A school can choose to use SAY for students enrolled in certain programs or on a student-by-student basis  A school must document their use of SAY and/or BBAY in their Policy and Procedure Manual

Benefits of using BBAY  Students can gain loan eligibility quicker than SAY year students  Use of BBAY can help cover higher cost programs more than using a SAY loan, since students gain eligibility quicker

Downfalls of BBAY  Constant monitoring of student’s enrollment pattern and the need to evaluate the starting and stopping of enrollment.  Students will use up lifetime loan eligibility quicker if they choose to go 3 terms continuously.  Financial Aid Systems may not be user friendly when awarding and disbursing BBAY loans.

Tips for Success if using BBAY  Read Chapter 5-Direct Loan Periods and Amounts from the FSA Handbook!  Write down different scenarios for your student populations and the amount of loan eligibility for each population.  Contact a Fed and ask them if what your interpretation of the regulations and awarding of BBAY loans for your students is correct!