As schools finalize their processes and procedures for the 2013-2014 award year, it’s time to take one more look at several Title IV changes that become effective on July 1, 2013.
ED regulatory changes:
- Interest subsidy: A first-time borrower on or after July 1, 2013, is eligible for Direct Subsidized loans for a period not to exceed 150 percent of the published length of the borrower’s current educational program. Under certain conditions, borrowers who exceed the 150 percent limit will also lose the interest subsidy on their Direct Subsidized loans.
- Entrance and exit counseling provided on or after July 1, 2013, must be updated to include this new information.
- ED will make system changes to the Common Origination and Disbursement (COD) System, the National Student Loan Data System (NSLDS), and the Central Processing System (CPS) to implement the 150 percent limit. See e-ANN dated June 20, 2013, for phase one of the COD system changes.
- Effective for all loans with a first disbursement on or after July 1, 2013, schools must report a Direct Loan’s academic year dates and loan period dates to COD, and report updates to this information, if applicable. See Dear Colleague Letter GEN-13-13.
- Income-based repayment (IBR): Effective July 1, 2013, there are new disclosures requirements related to the IBR plan to provide greater transparency for borrowers including: notification of income documentation requirements, repayment options after leaving the IBR plan, and the IBR loan forgiveness process. See the November 1, 2012 Final Rule [pdf].
- Total and permanent disability (TPD): Effective for TPD discharge applications received on or after July 1, 2013, all applications will be processed by ED’s TPD servicer, Nelnet. The new TPD discharge process will apply to all of the Title IV loan programs -Direct Loan, FFEL, and Perkins -and the Teacher Education and Access to College and Higher Education (TEACH) Grant Program. See e-ANNdated June 20, 2013 for more information on this topic.
- Verification: ED published a list of potential verification items for the 2013-2014 award year in the July 12, 2012, Federal Register [pdf].