2012-2013 Federal Update
Dear Students and Parents:
The 2012-13 academic year begins in just a few months. There are changes to the Federal Pell Grant and Federal Direct Loan programs that will become effective July 1, 2012, and that will impact you directly. We are bringing these changes to your attention so that you can plan accordingly for 2012-13!
Federal Pell Grant – currently, students are eligible to receive a Pell grant for up to 18 semesters. Effective July 1, 2012, the maximum eligibility will change to 12 semesters. This applies to all Pell grant recipients, not just first time recipients. Therefore, if you’ve been receiving a Pell Grant for an extended period of time, you may be getting close to meeting the 12 semester maximum and you could possibly lose some eligibility for 2012-13. You can review your Pell Grant disbursement history online at the NSLDS website via www.nslds.ed.gov to get a general idea of how many semesters you have used already.
Federal Direct Loans
v The federal government will no longer pay the interest on subsidized Stafford loans for undergraduate students during their six-month grace period. Interest will start to accrue on the loan as soon as the student leaves school or drops below half-time status
v The interest rate on subsidized Stafford loans will increase from 3.4% to 6.8% (President Obama’s new budget requests elimination of the increase but it is too soon to know if the budget will be approved). Interest rates for unsubsidized Stafford loans and graduate Stafford loans will remain at 6.8%
v Graduate students will no longer be eligible to borrow subsidized Stafford loans. They will be eligible for unsubsidized Stafford loans up to $20,500 and Federal Direct Graduate PLUS Loans
v The up-front interest rebate reduction on Federal Stafford and PLUS loans will be eliminated. In prior years, the up-front interest rebate helped to minimize the loan origination fees that the government charges borrowers, and put more money in the borrower’s hand. With the elimination of the rebates, the full origination fee (1% for Stafford loans & 4% for PLUS loans) will be deducted from the gross amount of your loan. For example, if a parent borrows a PLUS loan for $10,000, the school will only receive $9,600 to be used towards the student’s school costs
All of these changes become effective July 1, 2012. If anything changes over the next few months, we will notify you again. If you have any questions, please feel free to contact our office at (561) 237-7185 or financialaid@lynn.edu.
Sincerely,
The Office of Student Administrative Services
2012-2013 Verification Changes
Attention all federal financial aid recipients! The following information is very important, particularly to those returning students who have undergone the verification process and are accustomed to submitting tax returns. For the 2012-2013 academic year and onward, tax returns will not be an acceptable form of documentation where verification of your eligibility is concerned. Please read:
Due to new laws pertaining to the verification process, students and parents are strongly encouraged to complete and file their 2011 Federal Tax Return as soon as possible and then choose the IRS Data Retrieval option when completing the 2012-13 FAFSA. If your 2012-13 FAFSA is selected for verification, we will no longer be able to take paper copies of your 2011 tax return; you will be required to submit official tax transcripts from the IRS. Using the IRS Data Retrieval option to view & transfer your tax information into your FAFSA will minimize the chance of being selected for verification.
If you file your tax return electronically, the IRS Data Retrieval option will be available to you on the FAFSA website within 7-10 business days of filing. It will take approximately 6-8 weeks if you file a paper return. Therefore, we advise you to file your 2011 Federal Tax Return electronically to avoid delays.
If you or your parents have any questions regarding this matter, please contact Student Administrative Services at financialaid@lynn.edu, or call 561-237-7185.
Special Direct Consolidation Loan Information
On October 25, 2011, the Obama Administration announced several steps it is taking to increase college affordability by making it easier to manage student loan debt. Key initiatives include a “Pay As You Earn” repayment plan and a short-term consolidation opportunity that will be offered through the Department of Education (the Department) from January – June 30, 2012. The press release and an accompanying fact sheet are available at http://www.whitehouse.gov/briefing-room/statements-and-releases.
Special Direct Consolidation Loans are not the same as traditional consolidation loans offered under the William D. Ford Federal Direct Loan (Direct Loan) Program. Only certain borrowers will be eligible for Special Direct Consolidation Loans, and eligible borrowers will apply through a new and different online process. In addition, Special Direct Consolidation Loans will only be available for a short period of time from January – June 30, 2012.
How will the Special Direct Consolidation Loan Process work?
- Special Direct Consolidation Loans are not the same as traditional consolidation loans that borrowers can apply for today.
- Only certain borrowers will be eligible for Special Direct Consolidation Loans.
- Eligible borrowers will be contacted by one of four federal loan servicers starting in January 2012. Given the number of eligible borrowers, these contacts will occur over several weeks.
- The servicers that will contact eligible borrowers are FedLoan Servicing (PHEAA), Great Lakes Educational Loan Services, Inc., Nelnet, and Sallie Mae.
- The servicers will provide eligible borrowers with application instructions.
- After receiving application instructions from a servicer, eligible borrowers will apply through a new and different online process.
- Borrowers who may be eligible must not apply through the traditional Direct Consolidation Loan Web site (http://loanconsolidation.ed.gov).
What loans must a borrower have to be eligible for a Special Direct Consolidation Loan?
- At least one ED-held Direct Loan or ED-held FFEL loan and one commercially-held FFEL loan.
What loans are eligible for Special Direct Consolidation?
- Only commercially-held FFEL loans (subsidized, unsubsidized, PLUS, and consolidation).
- Commercially-held FFEL loans must be in grace, repayment, deferment, or forbearance.
- Commercially-held FFEL loans can be defaulted loans that have been rehabilitated.
- Commercially-held FFEL loans cannot be in default or subject to a bankruptcy proceeding.
What will a borrower gain by obtaining a Special Direct Consolidation Loan?
- One servicer and one payment, as opposed to one or more servicers with multiple bills and varying repayment requirements.
- For commercially-held FFEL loans that will be consolidated, a 0.25 percent reduction from each loan’s existing interest rate at the time of consolidation, plus the opportunity to receive an additional 0.25 percent interest rate reduction if automatic debit is chosen for repayment.
- For commercially-held FFEL loans with a variable interest rate at the time of consolidation, the conversion to a fixed interest rate at the lower percentage that will not change over time.
- No loss to previous time in repayment; it will count towards the repayment term for the new loan.
- No loss to previous Income-Based Repayment (IBR) payments; they will count towards the required repayment time for cancellation if the borrower remains in IBR.
- The commercially-held FFEL loans that will be consolidated will be eligible for discharge under the Public Service Loan Forgiveness Program.
11-12 Florida Aid Updates
Attention Florida students! The 2011-2012 Florida financial aid rates have now been published. They are as follows:
Florida Resident Access Grant- $2,149
Florida Student Assistance Grant- $2,413
Bright Futures Academic/Medallion- $101/$76 per credit
We will be revising award letters to include these new figures and will email notifications to you very soon.
Also, please be advised that, per state guidelines beginning the 11-12 academic year, all students will have to complete a FAFSA before receiving Florida state aid. This requirement should be nothing new to all of you returning students, since we have been requiring FAFSA completion for any form of aid at Lynn for two years now, but incoming freshmen should take note!
PLUS Applicants Take Caution
We would like to implore all Direct Parent PLUS Loan (PLUS) borrowers to exercise extreme caution when applying for the PLUS. If your social security number (SSN), date of birth or any other self-identifying information is not 100% accurate or your student’s SSN or any other information is not 100% accurate both on your PLUS Master Promissory Note (MPN) and on the PLUS application itself, even if you are approved for the loan, it will be rejected due to false information.
Per federal guidelines, all information listed for both the parent and student on your PLUS application and MPN must match exactly with that person. In the event that the information is not completely accurate, you are required to correct that information or reapply for the loan if needed. To avoid such problems, please complete your PLUS documents with care.