1. SULA! Don’t get stuck between a rock and a hard place!!
RMASFAA 2016 – Rapid City, south dakota

2. Session objectives WHO What When Where and how and why?
Re-define first-time borrower
What
Statutory changes and final regulations
When
150% Timeframe and calculations
Consequences
Loss of eligibility
Loss of subsidy
Where and how and why?

3. WHAT: Statutory change
Public Law , Moving Ahead for Progress in the 21th Century Act (MAP 21), enacted July 6, 2012.
Amended the HEA to establish a limit on Direct Subsidized Loan eligibility.
Waived requirement for negotiated rulemaking and master calendar.

4. WHAT: final regulations
Final Regulations posted January 17, 2014
Federal Register Volume 79, Number 12
Higher Education Act of 1965
As Amended Through Public Law 113–67, Enacted December 26, 2013
Sec. 455(q)
Page 480
SULA: Subsidized Usage Limit Applies

5. Who: Applies to First-Time Borrowers
A first-time borrower is considered to be:
Any student that does not have an outstanding balance on a FFEL or Direct Loan when receiving a Direct Loan on or after July, 1, 2013.
Example A:
Student has never borrowed before
Student enrolls in August 2013
Student receives a Direct Loan
Student is a first-time borrower
Example B:
Student received FFEL and Direct Loans prior to July 1, 2013
Student pays off all FFEL and Direct Loans in 2015
Student enrolls in 2017
Student receives a new Direct Loan in 2017
Student is a first-time borrower

6. When: 150% of Program Length

7. When: determining when eliigibilty is lost
150% limit is met and further eligibility is lost when Remaining Eligibility Period is zero (or less)

8. WHEN: example of remaining eligibility period
Student receives 3 years of Direct Subsidized Loans while enrolled in a two-year program. Student then transfers to a 4-year program.

9. WHEN: example of remaining eligibility period
Student receives 5 full years of Direct Subsidized Loans while enrolled in a 4-year BA program.

10. Consequence of 150%: eligibility loss
Borrower loses eligibility for additional Direct Subsidized Loans when borrower has received Direct Subsidized Loans for 150% of their current academic program.
If eligibility is lost, borrower may still be eligible for unsub.
Generally measured in time, not dollars.

11. Consequence of 150%: interest subsidy loss
Unless the borrower completed the program, continuing enrollment or enrollment in another undergraduate program of equal or lesser length results in the borrower losing interest subsidy benefits on outstanding subsidized loans, effective from the date of the continuing or new enrollment.

12. Consequence of 150%: interest subsidy loss

13. Consequence of 150%: Interest subsidy loss
Student received 6 years of Subsidized Loans while enrolled in a 4-year program. Student does not complete and enrolls for a 7th year.

14. Consequence of 150%: Interest subsidy loss
Student received 5 full years of Direct Subsidized Loans while enrolled in a 4-year program. Student does not complete and then enrolls in a 2-year program.

15. Consequence of 150%: Interest subsidy loss
Student received 5 years of Subsidized Loans while enrolled in a 4-year program. Student completes the program and then enrolls in a 2-year program.

16. Eligibility for direct unsub loans
A student cannot receive Direct Unsubsidized Loans for a loan period until the student has received all Subsidized Loan eligibility.

17. Eligibility for unsub example #1
Based on COA and EFC, a second-year dependent student is eligible for a Direct Subsidized Loan in the amount of the full annual loan limit of $4,500.

18. Eligibility for unsub example #2
Based on COA and EFC, a second-year dependent student is eligible for a Direct Subsidized Loan in an amount that is less than the full annual loan limit: $4,000.

19. HOW: reporting to COD

20. How: reporting to nslds

21. How: calculating subsidized usage period
Number of days in the loan period divided by number of days in academic year
If student’s status is less than full-time, you must prorate
Three-quarter time enrollment: Calculated Subsidized Usage Period x .75
Half-time enrollment: Calculated Subsidized Usage Period x .50

22. Example 1 Academic year 08/25/2014 – 05/15/2015
264 days in the academic year
Student is in 15 credits for fall
Fall loan amount $2750
Fall only loan (08/25/2014 – 12/19/2014)
117 days in the loan period
117/264 = .44
Subsidized Usage Period = .40

23. Example 2 Academic year 08/25/2014 – 05/15/2015
264 days in the academic year
Student is in 15 credits for fall
Fall loan amount $5500
Fall only loan (08/25/2014 – 12/19/2014)
117 days in the loan period
117/264 = .44
Subsidized Usage Period = 1
Annual loan limit received for a loan period less than a full academic year the sub usage period is 1
If the student less than full-time, you prorate SUP based on enrollment (ie: ¾ time enrollment, 1 x .75 = SUP of .75).

24. Example 3 Academic year 08/25/2014 – 05/15/2015
264 days in the academic year
Student is in 6 credits for fall
Fall loan amount $2750
Fall only loan (08/25/2014 – 12/19/2014)
117 days in the loan period
117/264 = .44
.44 x .50 = .22
Subsidized Usage Period = .2

25. Example 4 Academic year 08/25/2014 – 08/07/2015
348 days in the academic year
Student is in 12 credits for summer
Summer loan amount $1000
Summer only loan (05/18/2015 – 08/07/2015)
82 days in the loan period
82/348 = .23
Subsidized Usage Period = .2

26. Example 5 Academic year 08/25/2014 – 05/15/2015
264 days in the academic year
Student has two sub loan originations
Sub for 3000 (fall 1500/spring 1500)
Sub(2) for 500 (fall 250/spring 250)
Student is full time when sub disburses, but half time when sub(2) disburses
Subsidized Usage Period on COD for the year = .9
Each disbursement is worth a total of .25 if full time
.25 x 4 = 1
Student is half time for the first sub(2) disbursement so the sub usage period for that disbursement is .125
.25 x .50 = .125
COD assumes full time for future disbursements
= .875 rounded to the nearest 10th = .90

27. NSLDS example
Spring Enrollment: 12 credits, Summer Enrollment: 6 credits
Academic Year is Fall, Spring, Summer = 348 days
Spring Loan Period = 116 days
116/348 = .3 SUP for Spring.
Summer Loan Period = 82 days.
(82/348) = .235; .235 x .5 = .1 SUP for Summer
= .4 Years SUP

28. HOW: problems csu ran into
Summer enrollment reporting to NSLDS
CSU summer enrollment status
Undergraduates
Full time – 6 or more credits
Three quarter time – 5 credits
Half time – 3 to 4 credits
FA enrollment status
Full time – 12 or more credits
Three quarter time – 9 to 11 credits
Half time – 6 to 8 credits
RO reported CSU summer enrollment status therefore the subsidized usage period or remaining period was calculated incorrectly
Had to manually update enrollment on NSLDS
COD rejecting loans when 100% of fall was pulled back and loan period dates were adjusted to spring only during the same transaction

29. Questions?