When the agencies that provide financial aid change the rules and regulations, we will post the information to this page, helping you stay updated on what might affect your financial aid award package.

SEQUESTRATION - April 2013

On Friday, March 1, President Obama signed an order to implement sequestration, an across-the-board cutting of federal government programs. It is scheduled to impose additional cuts over the next 10 years but can be stopped at any time by Congress. While many specific details remain unknown, the Department of Education (ED) has released initial guidance.

How this affects you: The Pell Grant is protected for the 2012-13 and 2013-14 academic years. Starting in 2014-15, Pell will be subject to cuts as a result of sequestration. Direct loans with the first actual disbursement on or after July 1 will have increased origination fees. Stafford loan origination fees will rise from 1.00 to 1.051% and PLUS origination fees from 4.00 to 4.204%. Annual and aggregate loan limits are not impacted. The Department of Education is currently working on the implementing the higher fees and will send notices to students and parents affected by the change to inform them of the increase.

FEDERAL PELL GRANT CHANGES - 2012

Check out Studentaid.ed.gov for more information on federal updates.  

Verification
Some students who file the Free Application for Federal Student Aid (FAFSA) are selected for verification, a process by which the school must confirm the accuracy of the application information. Since the online FAFSA offers the IRS Data Retrieval Process to directly and accurately upload your tax return information, copies of your tax return will no longer be acceptable documentation for the verification process. We are no longer able to accept copies of the federal forms 1040, 1040A, and 1040EZ for verification.

How this affects you: If you are selected for verification, JCC will send you a Request for Information (RFI) letter. Review the RFI carefully to determine what documentation, or action, is required. The financial aid office may ask for additional documentation, such as a tax return transcript, available free from the IRS.  Only in rare instances will a copy of a tax return be requested.

Pell 600% Lifetime Eligibility
The Consolidated Appropriations Act of 2012 becomes effective July 1, 2012. It limits the receipt of a Pell Grant to a LIFETIME limit of 600%, which is 12 full-time semesters of study. This includes community colleges, vocational schools, and four year public and private universities. The US Department of Education will track the limit. Students who have earned a Bachelor’s Degree remain ineligible for Pell even if the 600% eligibility has not been reached. For more information, please view Studentaid.ed.gov.

How this affects you: When you receive the Pell grant for full-time study, you use 50% of the award per semester. This means that after your first full-time semester, you have used 50%; after your second full-time semester, you have used 100%; after your third full-time semester, you have used 150%, and so on until you reach 600%.  Part-time attendance is prorated based on credits enrolled.

Federal Year-Round Pell eliminated
President Obama’s FY 2012 budget request proposal to eliminate year-round Pell was fast-tracked for the 2011-12 academic year. The elimination is projected to save $8 billion over the next two years and help lower the projected $20 billion Pell grant shortfall that would have occurred for the 2012-13 academic year if the program was unchanged. Good for American taxpayers, not so great for JCC students interested in assistance with summer studies.

How this affects you: Some students who studied full-time for the entire 2010-11 academic year were able to receive a Pell grant award for Summer 2011 enrollment. This was known as year-round Pell, the second scheduled award within the award year, and it is no longer available. Now, part-time students and full-time students who attend one semester (fall or spring but not both) do not utilize 100% of the Pell grant award and have remaining funds for summer enrollment. 

FEDERAL DIRECT LOAN CHANGES - 2012

Direct Loan Interest Rebate No Longer Offered
The Budget Control Act of 2011 passed by Congress and signed into law by President Obama on August 2, 2011 had many changes to solve the 2011 debt-ceiling crisis. One of the changes is that the up-front interest rebate offered on Stafford loans and Parent PLUS loans was eliminated. Loan borrowers saw this rebate on the amount of loan that was disbursed and were eligible to keep the up-front rebate, providing the first 12 required payments were made on-time.

How this affects you: All federal loans originated after 7/1/2012 will have origination fees applied on the front end which will reduce the borrower’s net payment for each semester as follows: Stafford loan origination fee will be 1% and Parent PLUS loan fee will be 4%.

Direct Subsidized Loan Grace Period Subsidy eliminated - Amended
Public Law 112-74 amended HEA section 428 to temporarily eliminate the interest subsidy provided on Direct Subsidized Loans during the six month grace period provided to students when they are no longer enrolled on at least a half-time basis.  This was supposed to go into effect July 1, 2012. However, Congress passed legislation on June 29, 2012 to extend the 3.4 percent interest rate on subsidized Stafford student loans for one year only. It is expected that President Obama will sign this extension into law.

How this affects you: No change for the 2012-13 academic year so far. However, the extension was only for one year. As the legislation currently stands, therefore, if you borrow a subsidized loan that disburses on or after July 1, 2013 and drop below half-time, your loan will start accruing interest immediately like any unsubsidized loan you have borrowed. To avoid interest charges, you must pay off the loan before entering grace period. With subsidized loans, the government pays the interest while you are attending school and enrolled in at least 6 credits; unsubsidized loans start accruing interest upon disbursement.

Direct Subsidized Loan Interest Rate May Increase
Under current law, subsidized loans disbursed after 7/1/12 will have an interest rate of 6.8%, same as the unsubsidized rate. The interest on subsidized loans will still be paid by the government during times of in-school deferments and certain other situations. There is pending legislation to lower this interest rate.

How this affects you: A higher rate means you will pay more interest over the lifetime of your loan. You need to voice your opinion if you would like to see an interest rate more in keeping with the current and lower interest rate for federal subsidized loans.

HOW CAN YOU GET INVOLVED?

Voting matters!

Take action with the Project on Student Debt, an initiative of the Institute for College Access and Success, dedicated to making college more affordable.

Join the movement with United States Student Association, the country's oldest student led organization mobilizing grassroots power to win student issues.

TO CONTACT YOUR LOCAL REPRESENTATIVE OR STAY INFORMED:

US House of Representatives

US Senate

The White House

US Department of Education