Recent Changes to Federal Student Aid

Recent Changes to Federal Student Aid

As a result of recent legislative changes you should be aware of a number of new requirements for the Federal Student Aid programs. Below is an overview of changes that could impact your financial aid for the upcoming 2012-2013 academic year and in the future.

FEDERAL PELL GRANT

Lifetime Limit for Federal Pell Grant

In December 2011, President Obama signed into law the Consolidated Appropriations Act, 2012 (Public Law 112-74). This law has significantly impacted the Pell Grant Program. Beginning with the 2012-2013 school year, students are now limited to six full time years (18 quarters or 600%) of Pell Grant eligibility during their lifetime. This change affects all students regardless of when or where they received their first Pell Grant. Students that have already used six full time years (600%) of their Pell Grant eligibility will no longer be eligible to receive a Pell Grant starting in the 2012-2013 school year.

How do I know if this affects me?

If you have attended college for four years or longer, receiving the Pell Grant each year, it is possible you are near or have already reached your six year limit (600%).

The Federal government indicated that they will be notifying colleges of the students who are near or have reached their lifetime limit. Baker College will immediately communicate this information to the students who are impacted by this new legislation.

How is the lifetime Pell amount calculated?

  • A student who attends full time for the year will receive 100% of a Pell grant for that year. As a result, a student who has received a Pell grant as a full time student for all years will reach their 600% lifetime maximum in six years.
  • A student who attends half time for the year will receive 50% of a Pell grant for that year. As a result, a student who has received a Pell grant as a part time student for all years will reach their 600% lifetime maximum in 12 years.
  • A student who attends various enrollment statuses will be prorated accordingly.


FEDERAL DIRECT STUDENT LOAN CHANGES

Disbursement Regulations

Loans for a single quarter must be paid in two equal disbursements.

  • The second disbursement of a single quarter loan cannot be paid until after the half way point of the quarter and attendance has been verified.
  • The student’s full refund will be available after the second disbursement has been paid.
  • Students who withdraw or stop attending prior to the half way point of the quarter will not be eligible for the second disbursement.

Please note: Baker College encourages all students to request a full year loan when possible.

Interest Subsidy

Direct Subsidized loans will not be eligible for an interest subsidy during the six month grace period. This change is effective for new Direct Subsidized loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.

Subsidized loans for Graduate and Professional Students

Graduate and Professional students are no longer eligible to receive Direct Subsidized loans. This is effective for loans made for periods of enrollment (loan periods) beginning on or after July 1, 2012. Graduate and Professional students will continue to be eligible for Direct Unsubsidized loans.

Repayment Incentives

The Department of Education can no longer offer any repayment incentives to Direct Loan borrowers. As a result, the up-front interest rebate that has been provided to Direct Loan borrowers at the time of loan disbursement will not be offered on any Direct Loan. This change is effective for all loans with a first disbursement date that is on or after July 1, 2012. The student will be responsible for a 1% origination fee.

Please contact your campus Financial Aid Office with any questions on these recent changes. Link financial aid office to campus contact information page. http://www.baker.edu/departments/finaid/campus-contact-information/

The Baker College System
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