Important Changes

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 - October  2014

Because sequestration is still in effect, the direct loan origination fees are rising. 

How this affects you: Direct loans with the first actual disbursement on or after December 1, 2013 will have increased origination fees. Stafford loan origination fees will rise from 1.072% to 1.073% and PLUS origination fees from 4.288% to 4.292%. 

Direct Federal Loan Interest Rates Increase - July 2014

Using the formula established in the Bipartisan Student Loan Certainty Act of 2013 and based on the Treasury Department's 10-year Treasury note auction on May 7, 2014, interest rates will increase for all Direct loans.

How this affects you: Undergraduate subsidized and unsubsidized loans will increase to 4.66% interest; Parent PLUS loans will increase to 7.21%. This will affect loans first disbursed between July 1, 2014 and June 30, 2015 only. 

Direct Federal Loan Interest Rates Decrease - August 2013

The Bipartisan Student Loan Certainty Act of 2013 has been signed by President Obama and provides new formulas for determination of interest rates on Direct Federal Subsidized, Direct Federal Unsubsidized, and Direct Federal Parent PLUS loans with a first disbursement on or after July 1, 2013.  The loans will have a variable/fixed rate which means that the interest rate is determined at a specific point of time each year and will stay the same for the full life of the loan (changing only if consolidated). The Interest rate is based on the last 10-year US Treasury bill prior to June 1. Origination fees remain unchanged. There is no change regarding the subsidy of subsidized loans; the government still pays the interest while you are in-school deferment only.

How this affects you: If you have or will borrow a federal direct loan after July 1, 2013, the interest rate for Stafford undergraduate subsidized and unsubsidized loans is 3.86% and for Parent PLUS loans is 6.41%. Loans disbursed before July 1 will not be affected. Next year if you borrow, that new loan will have the new rate established that year, which may be different from the interest rate on the previous year’s loan. Since interest rates won’t be known for the next year until after June 1, it may be more difficult for you to determine your best borrowing option. Be sure to check back here for the official US DOE guidance.

150% Direct Subsidized Loan Limit - May 2013

On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21)(Public Law 112-141) was enacted and limits a first-time borrower's eligibility for Direct Subsidized Loans to a period not to exceed 150% of the length of the borrower's educational program. In May 2013, interim final regulations were implemented.

NOTE: Only first-time borrowers on or after July 1, 2013 are subject to the new provision. Generally a first-time borrower is one who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan on July 1, 2013.

How this affects you: As outlined in your entrance counseling, the subsidized loan has slightly better terms than the unsubsidized: historically, the US Department of Education has paid the interest for a subsidized loan while you're in school at least half-time and the interest rate has been lower than for unsubsidized loans. If you are a first-time borrower or have paid off previous loans, MAP-21 affects you by limiting the time period during which you can receive Direct Subsidized loans to 150% of the standard length of the program in which you are enrolled. For a 2-year associate degree program, the maximum period you can receive subsidized loans is 3 years (150% of 2 years = 3 years). The period used will be reduced for less than full-time study. Once you have received Direct Subsidized Loans for your maximum eligibility period, you may continue to receive Direct Unsubsidized loans and your subsidized loans may begin accruing interest. Congress wants to encourage students to obtain a degree within a reasonable time frame. We recommend you meet with your advisor to help ensure you're enrolling in classes required to complete your degree and avoid excess withdrawals or retaking of coursework. Resources like your campus tutoring center can help you meet your goals. For detailed information, view this announcement from the US Department of Education.

SEQUESTRATION - December 2013

Because sequestration is still in effect, the direct loan origination fees are rising. 

How this affects you: Direct loans with the first actual disbursement on or after December 1, 2013 will have increased origination fees. Stafford loan origination fees will rise from 1.051% to 1.072% and PLUS origination fees from 4.204% to 4.288%. 

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.

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

Direct Subsidized Loan Interest Rate Increases - May 2013