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The Office of Financial Aid would like to share with you a number of changes to student federal loans and grants for the 2016–2017 academic year.
New Federal Student Loan Interest Rates
The Bipartisan Student Loan Certainty Act ties the interest rate for federal student loans to the yield on the U.S. Treasury 10-year borrowing rate. The Act, which affects federal student loans that are first disbursed on or after July 1, 2013, establishes a cap for the maximum interest that can be charged for federal student loans.
Federal Pell Grant Program
The maximum Pell Grant award for 2016-17 has increased to $5,185. Pell grant eligibility is calculated based on your Estimated Family Contribution (EFC). The maximum EFC to be Pell eligible during the 2016-17 year is 5,234. Once you have received a Pell Grant for 12 semesters, or the equivalent, you will no longer be eligible for additional Pell Grants.
Federal Direct Loan Programs
The U.S. Department of Education (DOE) has not yet announced fees for loans disbursed on or after October 1, 2016.
Earlier Release of the FAFSA and Prior-Prior Year (PPY)
In order to make the FAFSA easier to fill out, more accurate, and to get families information on their aid packages earlier, the White House announced that the FAFSA will now be available on October 1st of each year, rather than the following January 1st. Additionally, families will use the previous year’s completed tax information. For example, the 2017-18 FAFSA will come out on October 1, 2016 and will require 2015 tax information. For more information on how these changes help students, please watch this short video.
Emphasized Use of the IRS Data Retrieval Tool
To ensure you receive an accurate award and to make the application easier to fill out, students and parents are strongly encouraged to use the IRS Data Retrieval Tool to fill out income information in the application. Rather than estimating or manually entering information, this tool allows parents and students to transfer their processed tax information directly from the IRS and autofill the income questions. For a screen by screen guide to use this tool in the FAFSA, please watch this video.
A School Cannot View Other Schools listed on the FAFSA
Students are able to include up to 10 school codes at a time on their FAFSA. Beginning with the 2016-17 application, each school will only be able to see its own code. Any other school codes and the order the schools are listed on the application will not be visible.
Use of DD214 to Verify High School Completion Status
The Department of Education may ask your school to verify your high school completion status among other things. If a student is unable to provide alternative documentation, a DD Form 214 Certificate of Release or Discharge from Active Duty may serve as documentation to verify a student’s high school completion.
Victims of IRS Tax-Related Identity Theft
If a victim of tax-related identity theft is selected by the Department of Education for verification, the tax-filer should provide the Tax Return DataBase View (TRDBV) transcript. The tax filer should also provide a signed and dated statement indicating that they were victims of IRS tax-related identity theft and that the IRS has been made aware of this. Tax filers can contact the IRS’s Identity Protection Specialized Unit (IPSU) at 1-800-908-4490 to obtain this transcript and inform the IRS of the identity theft.
Tax Filers Who Filed an Amended Tax Return
If a student or parent who filed an amended tax return is selected by the Department of Education for verification, the tax-filer should provide a transcript obtained from the IRS that lists tax account information and a signed copy of the IRS Form 1040X that was filed with the IRS.
FSA ID/PIN Replacement
Beginning on May 10th, 2015, the Department of Education introduced the FSA ID to replace the Federal Student Aid PIN system. It is a new username and password system that students, parents, and borrowers are required to use to access U.S. Department of Education financial aid documents, including the FAFSA. The purpose of this FSA ID is to confirm your identity and to allow you to electronically sign and submit federal student aid documents. A step by step guide to creating your FSA ID can be found here.
150% Direct Subsidized Loan Limit
First-time borrowers after July 1, 2013 are subject to the 150% Subsidized Loan Limit. To remain eligible for subsidized student loans, a student must complete their program in 150% of the published length of the program. If a student takes longer than 150% of the published program length to complete it, the student will no longer be eligible to receive subsidized student loans. The student will still be eligible for unsubsidized loans.
For example, if you enroll in a 4-year bachelor’s degree program, you can receive subsidized loans for up to 6 years (150% of 4 years = 6 years). For more information on the time limitation on direct subsidized loans, click here.
Please contact our Office of Financial Aid at Financial_Aid@kendall.edu or via phone at 312.752.2070 if you have specific questions about the impact of the sequester on your federal financial aid program. Additional information is also available at www.studentloans.gov or here.
You may also visit Student Aid on the Web to learn about these changes.