|
Grant Community.com Catalog of Federal Domestic Assistance Program Descriptions |
CATALOG OF FEDERAL DOMESTIC
ASSISTANCE
84.268: Federal Direct Loan
|
| PROGRAM AND AWARD | FINANCIAL AND INFORMATION CONTACTS |
| ELIGIBILITY REQUIREMENTS | FINANCIAL AND ADMINISTRATIVE INFO. |
| APPLICATION AND AWARD PROCESS | INFORMATION CONTACTS |
| RELATED PROGRAMS | ASSISTANCE CONSIDERATIONS |
| PROGRAM ACCOMPLISHMENTS | POST ASSISTANCE REQUIREMENTS |
Applicant Eligibility: The applicant must be a U.S. citizen, national, or person in the United States for other than a temporary purpose. A student borrower must be enrolled or accepted for enrollment in a degree or certificate program on at least a half-time basis as an undergraduate, graduate, or professional student at a participating postsecondary school. An otherwise eligible student is eligible for loans during a single 12-month period in which the student is enrolled in a non-degree/non-certificate course of study that the school has determined is necessary in order for the student to enroll in a program leading to a degree or certificate. Under the Direct PLUS program, parents may borrow for dependent students. Direct Unsubsidized and PLUS loans are non-need based programs. In order to receive a Direct Subsidized Loan, all borrowers must undergo a financial need analysis to determine eligibility for Federal interest. A student that is presently enrolled at a participating institution must be maintaining satisfactory academic progress in the course of study that they are pursuing. The borrower may not owe a refund on any Title IV grant or be in default on any Title IV loan received for attendance at any school. The borrower must also file a Statement of Registration compliance (Selective Service). Borrowers that are unable to obtain consolidation loans from lenders under FFEL or who are unable to obtain a consolidation loan with income sensitive repayment terms acceptable to the borrower from a lender, shall be eligible for a Direct Consolidation Loan. Married couples may consolidate eligible loans.
Beneficiary Eligibility: Vocational, undergraduate, and graduate postsecondary school students and their parents.
Credentials/Documentation: The borrower will need certification of eligibility from the school and may be required to supply documentation to verify the accuracy of data used in the Direct Subsidized loan need analysis.
Preapplication Coordination: Information regarding application procedures may be obtained from the school and the Department of Education. This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under E.O. 12372.
Application Procedure: Applications for the Direct Subsidized and Unsubsidized loans are obtained from the school. Direct consolidation loan applications are obtained from the Department of Education. To obtain a Direct Subsidized or Unsubsidized loan, a student shall complete and submit a Free Application for Federal Student Aid (FAFSA). All applications (with the exception of PLUS) for Direct Loans are processed by the Central Processor System (CPS) in the initial step to determine a student's Title IV eligibility. Schools will receive official output from CPS. With this official output, the school will be able to assemble a financial aid award package. A school participating in the Direct Loan Program may award Direct Loans as part of the financial aid package. If a Direct Loan is not included in the aid package, a student may contact the school to request loan information.
Award Procedure: Schools participate in the Direct Loan Program either by originating loans or by using an alternative originator to originate loans. The school must certify the borrower's eligibility to receive the funds. To obtain a Direct PLUS loan, the parent shall complete an application and authorize a credit check. If the parent does not have an adverse credit history the loan maybe disbursed. Schools may disburse funds by crediting them directly to the student's account at the school, issuing a check or cash, or by initiating an electronic fund transfer.
Deadlines: None.
Range of Approval/Disapproval Time: None.
Appeals: None.
Renewals: None.
Criteria for Selecting Proposals: Not applicable.
Examples of Funded Projects: Not applicable.
Range and Average of Financial Assistance: A range is not available.
As of January 2000, 1,567 schools were participating in the program.
Federal Agency: OFFICE OF STUDENT FINANCIAL ASSISTANCE, DEPARTMENT OF EDUCATION
Type of Assistance: Direct Loans.
Obligations: (Loan volume disbursed; net of consolidations) FY 99 $17,959,000,000; FY 00 est $14,855,000,000; and FY 01 est $15,613,000,000. Direct Loan Consolidation volume: FY 99 $8,006,000,000; FY 00 est $4,250,000,000; and FY 01 est $4,403,000,000.
Budget Account Number: 91-0243-0-1-502.
Authorization: Higher Education Act of 1965, Title IV, Part D, as amended.
Regulations, Guidelines, and Literature: Student Loan Reform Act of 1993, Public Law 103-66, 34 CFR 685.
Regional or Local Office: See the list of Regional Offices listed in Appendix 5 of the FFEL Catalog.
Headquarters Office: Federal Direct Loans, Office of Student Financial Assistance, Department of Education, Washington, DC 20202. Phone: (202) 708-9951.
(See Appendix IV for more contact info.)
Formula and Matching Requirements: None.
Length and Time Phasing of Assistance: Applicants may apply for a loan for any year of school. There are four repayment plans that are available for Direct Loan borrowers: (1) A standard repayment plan with a fixed monthly payment amount over a period of up to 10 years; (2) an extended repayment plan with a fixed monthly payment amount paid over a period of 12 to 30 years, depending on the amount owed; (3) a graduated repayment plan with a monthly payment that will increase generally every 2 years. The repayment period varies from 12 to 30 years, depending on the amount owed; and (4) except for Direct PLUS Loan borrowers, an income contingent repayment (ICR) plan with a monthly payment that is adjusted annually based on the income of the borrower and paid over a extended period of time not to exceed 25 years. Any unpaid balance remaining after 25 years in the ICR plan is forgiven by the Secretary of Education. However, under current IRS rules, the amount written off is considered taxable income to the borrower in the year it is written off. A legislative change removing this taxable treatment has been sought.
Uses and Use Restrictions: To help defray costs of education at a participating school. Generally, a student borrower is not required to make any payments on the principal of a direct subsidized or unsubsidized loan during the time the borrower is in school. Repayment on these loans will begin six months after the student ceases to carry at least one-half the normal full-time academic workload. The repayment period for a Direct PLUS loan begins on the day after the loan is fully disbursed. The repayment period for a Direct Consolidation Loan begins on the day the loan is disbursed, unless the consolidation loan includes a Direct Loan or a Federal Family Education Loan program for which the borrower is in an in-school period at the time of consolidation. In this case, the repayment period begins six months after the borrower ceases at least half-time enrollment.
Reports: The Department will produce a variety of management information system accounting, and financial management reports. Schools must submit all reports required by 34 CFR 685 and 34 CFR 668.
Audits: Schools are subject to examination and program review by the Department of Education. Program reviews are performed on a fiscal year basis.
Records: Schools must maintain proper administrative and fiscal procedures and all necessary records as set forth in the regulations in 34 CFR 685 and 34 CFR 668. Schools must keep all records involved in any loan, claim, or expenditure questioned by a Federal audit until resolution of any audit questions. In addition to records required by 34 CFR 668, for each Direct Loan received under 34 CFR 685 by or on behalf of this student, a school shall maintain a copy of the loan application and data electronically submitted to the Secretary.
About
News Grant
Management Software Federal
Grant Programs Audits
Studies Expenditures
Links
Last Updated, November, 2000
Comments or Questions? ©Grant
Community.com 2000, All Rights Reserved