Scheduled and Borrower Based Academic Years

Linda Burkhardt Marianna Deeken U. S. Department of Education

Annual Loan Limits
• Apply to an academic year as defined by school • HEA minimum academic year requirements
– 30 weeks of instruction, 24 semester credits – 30 weeks of instruction, 36 quarter credits – 26 weeks of instruction, 900 clock hours
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Increased Borrowing Within Same Academic Year
• Has not yet borrowed full eligibility at current grade level • Advances to next grade level • Becomes independent • Increase in COA • Decrease in EFC • Decrease in EFA
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Annual Loan Limits
Dependent Independent 1st year undergraduate $2625 ($3500) 2nd year $3500 undergraduate ($4500) 3rd year and above $5500 undergraduate Grad/Professional $2625 ($3500) $3500 ($4500) $5500 $8500

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Dependent Loan Eligibility
• Eligible for loan amount up to grade level limit
– May be subsidized, unsubsidized, or combination of subsidized and unsubsidized

• Subsidized loan limited by financial need and grade level • Unsubsidized loan is not need-based
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Dependent Loan Eligibility
COA - EFC - EFA = Loan eligibility up to grade level limit $ 8950 COA - 3247 EFC 800 Pell Grant = 4903 Need

•Grade level limit for first year student is $2,625 •Student has enough need to receive $2,625 in subsidized loan
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Dependent Loan Eligibility
COA - EFC - EFA = Loan Eligibility up to grade level limit $ 6950 - 3694 400 = 2856 COA EFC Pell Grant Need

•Grade level limit for second year student is $3,500 •Student has need for $2,856 in subsidized funds •Remaining $644 may be awarded as unsubsidized loan funds
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Additional Unsubsidized Loan Eligibility
• Eligibility for additional unsubsidized loan is limited to
– Independent students – Dependent students whose parents cannot borrow a PLUS

• Additional unsubsidized loan eligibility is not need based
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Annual Loan Limits Additional Unsubsidized Loan
Undergraduate 1st year Undergraduate 2nd year Undergraduate 3rd year+ Graduate/Professional $ 4,000 $ 4,000 $ 5,000 $10,000 ($12,000)
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Additional Unsubsidized Eligibility
COA - EFA = Loan Eligibility up to grade level limit $ 8950 COA 800 Pell Grant 2625 Sub Loan = 5525 remaining eligibility

•Grade level limit for a first year student is $4,000 •Student may receive additional unsubsidized of $4,000
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Additional Unsubsidized Eligibility
COA - EFA = Loan Eligibility up to grade level limit $ 6950 COA 400 Pell Grant 2856 Sub loan 644 Unsub loan = 3050 remaining eligibility

•Grade level limit for a 2nd year student is $4,000 •So as not to exceed the cost of attendance, student may only receive $3,050 in additional unsubsidized loan funds
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Additional Unsubsidized Eligibility
COA EFA--Pell Subsidized Unsubsidized Remaining eligibility $ 6950 - 400 - 2856 - 3694 -0-

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Scheduled Academic Year (SAY)
• For use in standard term-based programs only • Fixed period time, usually corresponds to schools’ official academic calendar • Generally begins at same time each year • Example – fall/winter/spring or fall/spring
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Scheduled Academic Year (SAY)
• Summer term may be “header” or “trailer” • Summer mini-sessions may be treated as single term or individual terms • Loan period may include only portion of SAY

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SAY: Standard Term-based Program 2-Year Semester-Based Credit
Hour Program Academic Year 24 Credits/ 30 Weeks Fall 1st SAY $2,625 Spring Fall Spring 2nd SAY $3,500

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Regain Eligibility at Beginning of SAY
• Example 1 (Summer Trailer) • First year student attends Fall & Spring year 1
– No loan in Fall, $2,625 loan in Spring – No summer attendance

• Fall year 2 begins new SAY
– Student regains eligibility for new loan at appropriate grade level.
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SAY Example 1
Loan period 1 $2,625 Fall 1st SAY $2,625 Spring Fall Loan period 2 $3,500 Spring 2nd SAY $3,500

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Regain Eligibility at Beginning of SAY
• Example 2 (Summer Trailer) • Second year student attends Fall year 1 and Summer trailer
– $1,000 loan in Fall, $2,500 loan in Summer

• Fall year 2 begins new SAY
– Student regains eligibility for new loan at appropriate grade level
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SAY Example 2
Loan period 1 $1,000 Fall Loan period 2 $2,500 Spring 1st SAY $3,500 Summer Loan period 3 $5,500 Fall Spring 2nd SAY $5,500

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BBAY Term-based
• Non-standard term based programs must use
– Standard term–based programs may use

• BBAY must include same number of terms as the school’s definition of an academic year • Floats with student’s enrollment, but student must attend first term of BBAY • Mini-sessions must be combined as single term • If BBAY includes summer, may be shorter in weeks/hours than statutory academic year 20 definition

BBAY: Standard Term-based Program
2-Year Semester-based Credit Hour Program Academic Year 24 Credits/ 30 Weeks
Fall-15 wks Spring-15 wks Summer-10wks Fall-15wks

1st BBAY $2,625

2nd BBAY $3,500

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BBAY: Standard Term-based Program
2-Year Semester-based Credit Hour Program Academic Year 24 Credits/ 30 Weeks Spring Summer Fall Spring $3,500

1st BBAY $2,625

2nd BBAY

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SAY/BBAY Combined to Maximize Borrowing
Loan period 1 $8,500 Fall Spring 1st period SAY $8,500 Loan period 3 $8,500 Summer Fall 3rd period BBAY $8,500 Summer Loan period 2 $8,500 Fall Spring 2nd period BBAY $8,500

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BBAY: Non-standard Term School
2-Year 8 week term-based program Academic Year 24 Credits/ 32 Weeks Spring 1 Spring 2 Summer Fall 1

1st BBAY $2,625 Fall 2 Spring 1 Spring 2 Summer 2nd BBAY $3,500
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BBAY: Non-standard Term School
• Student must complete the hours and the weeks in order to advance to next grade level
– Student may still receive loan disbursement as long as at least ½ time – May result in a delay of receipt of next annual loan limit
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BBAY: Non-standard Term School
2-Year 8 week term-based program Academic Year 24 Credits/ 32 Weeks Student only attends ½ time in each Spring term Spring 1(3) Spring 2 (3) ummer (6) Fall 1 (6) S 1st BBAY Fall 2 (6) No loan Spring 1 Spring 2 Summer Fall 1

2nd BBAY
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• Must use BBAY • BBAY must meet minimum statutory definition of academic year • Floats with student’s enrollment • Eligibility for new annual loan limit is not regained until student completes both weeks & hours in statutory definition of academic year
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BBAY: Credit Hour Non-Term & Clock Hour

Example 1 • Second year student loan period 9/1 to 5/15, includes 24 semester hours • Withdraws from program on 11/1 after receiving $1,750 • Starts new program 11/28, as first year student • May only borrow $875 until end of new academic year

BBAY: Credit Hour Non-Term & Clock Hour

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Example of BBAY Non-Term Credit Hour Program
First Loan Period 9/1 to 5/15 $3,500
Pay Period 1 12 hours/16 weeks Pay Period 2 12 hours/16 weeks

$1,750

Second Loan Period 11/28 to 6/27 $2,625 - $1,750 = $875
Pay Period 1 12 hours/15 weeks Pay Period 2 12 hours/15 weeks

$438

$437

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BBAY - Clock Hour Program
1200 Clock Hour Program with 900 Clock Hour, 26 week Academic Year

450

450

300 Remaining Portion of 2nd BBAY $3,500 x 300 = $1167 30 900

1st BBAY includes both 900 hours & 26 weeks $2,625

Loan Period Lengths
• Standard term-based
– Minimum is a single academic term

• Non-standard terms, Credit hour non-term and Clock hour
– Lesser of
• Length of student’s program of study • Program’s academic year as defined by school, or • Remaining portion of student’s program of study

• In all programs, maximum loan period is schools’ academic year, not to exceed 12 months

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Monitoring Frequency of Annual Loan Limits
• Schools are responsible for determining student eligibility for new annual loan limit • Must adjust loan for any amounts received at previous school if loan period overlaps new school’s academic year
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Transfer Student: Term-based to Term-based
• Student borrows $2,625 for fall/spring semesters at School A
– Loan period is 09/07/05 to 05/06/06

• Student transfers to School B for winter quarter, beginning 01/10/06, after receiving $1,313 at School A • Student may borrow the difference between his annual loan limit at School B and $1,313 received at School A
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Transfer Student: Non-term to Term-based
• Credit hour non-term program has final period of study of 18 weeks, 24 credits
– Student borrows $3,500 – Loan period is 3/15/06 to 7/17/06

• Student begins fall semester at School C on 9/08/06 as a second year student
– Since 30 weeks from 3/15/06 ends 10/08/06, you have overlapping academic year – Until academic year ends, student has no loan eligibility for fall term at School C
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Transfer Student: Clock Hour To Clock Hour
• Withdraws from School A’s 1800 hour program after completion of 750 hours • Received $2,625 Stafford Loan funds for first academic year of 900 hours
– Loan period of 7/12/05 to 02/11/06

• Enrolls in your school’s 1800 hour program with 1050 hours to complete, beginning on 1/10/06
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Transfer Student: Clock Hour To Clock Hour
• Overlapping loan periods
– Student begins at your school prior to end of academic year at first school

• Since student is a first year student at your school, and has already borrowed $2,625 in the academic year
– Student has no loan eligibility at your school until completion of your school’s academic year
• 26 weeks minimum
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Transfer Student
• Withdraws from School A’s 900 clock hour program after completion of 440 clock hours
– Had Stafford Loan for 900 clock hour program

• Enrolls in your school’s 900 hour program with 460 hours to complete • Can you give the student a Stafford loan at your school?

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Student Wants 2nd Loan For Remaining Period
• Program is 1500 clock hours
– Academic year is 900 clock hours and 30 weeks

• Completes 900 clock hours in 26 weeks
– 900 hours in 26 weeks is 35 hours per week

• Must wait for 30 weeks prior to awarding new loan
– Student will have completed an additional 140 clock hours in 4 more weeks, for a total of 1040 clock hours

• Second loan will be for loan period of 460 clock hours, approximately 14 weeks

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Answer
• Second loan when 30 weeks have elapsed • 460 clock hours – 900/26 = 35 – 30 – 26 = 4 – 4 X 35 = 140 – 900 + 140 = 1040 – 1500 – 1040 = 460 • After student has completed 230 hours AND reached calendar midpoint of loan period, second disbursement may be made
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Student Changes Programs At Your School
• When the student leaves the first program, do R2T4 calculation • Student begins second program as new student
– Look at prior loan period – Look at loan dollars already received

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Questions??
Linda Burkhardt linda.burkhardt@ed.gov (206) 615-2174 Marianna Deeken marianna.deeken@ed.gov (206) 615-2583
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