National Student Aid Profile: Overview of 2015 …In this profile, you will find an overview of the...

NATIONAL STUDENT AID PROFILE: OVERVIEW OF 2015 FEDERAL PROGRAMS

Published July 2015

i ©2015-NationalStudentAidProfile:Overviewof2015FederalPrograms

Table of Contents Overview.................................................................................................................................................................................1TheFederalPellGrantProgram.............................................................................................................................................4Campus-BasedAidPrograms..................................................................................................................................................6TheFederalSupplementalEducationalOpportunityGrantProgram.....................................................................................6TheFederalWork-StudyProgram..........................................................................................................................................8TheFederalPerkinsLoanProgram.......................................................................................................................................10TheFederalFamilyEducationLoanProgramandWilliamD.FordDirectStudentLoanProgram.......................................12FederalNeedAnalysis..........................................................................................................................................................16FiscalYear2015BudgetandAppropriationsUpdate...........................................................................................................17Conclusion............................................................................................................................................................................17

Tables Table1.SummaryDescriptionsoftheMajorFederalStudentAidPrograms........................................................................2Table2.NumberandDistributionofPellGrantRecipientsbyFamilyIncomeLevel,AwardYear2012-2013.......................4Table3a.NumberofDependentUndergraduatesWhoReceivedFederalSupplementalEducationalOpportunityGrantsbyFamilyIncomeLevel,AwardYear2012-2013................................................................................6

Table3b.NumberofIndependentUndergraduatesWhoReceivedFederalSupplementalEducationalOpportunityGrantsbyFamilyIncomeLevel,AwardYear2012-2013................................................................................6

Table4a.NumberofDependentUndergraduatesWhoReceivedFederalWork-StudyAwardsbyFamilyIncomeLevel,AwardYear2012-2013.................................................................................................................................8

Table4b.NumberofIndependentUndergraduatesWhoReceivedFederalWork-StudyAwardsbyFamilyIncomeLevel,AwardYear2012-2013.................................................................................................................8

Table5a.NumberofDependentUndergraduatesWhoReceivedPerkinsLoansbyFamilyIncomeLevel,AwardYear2012-2013......................................................................................................................................................10

Table5b.NumberofIndependentUndergraduatesWhoReceivedPerkinsLoansbyFamilyIncomeLevel,AwardYear2012-2013......................................................................................................................................................10

Table6.UndergraduatesWhoReceivedFederalSubsidizedDirectLoansbyFamilyIncomeLevel,AwardYear2011-2012.........................................................................................................................................................................14

Table7.UndergraduatesWhoReceivedFederalUnsubsidizedDirectLoansbyFamilyIncomeLevel,AwardYear2011-2012.........................................................................................................................................................................15

Table8.UndergraduatesWhoseParentsReceivedFederalPLUSLoansbyFamilyIncomeLevel,AwardYear2011-2012.........................................................................................................................................................................15

Table9.Graduate/ProfessionalStudentsWhoReceivedFederalPLUSLoansbyIncomeLevel,AwardYear2011-2012.........................................................................................................................................................................15

Figures Figure1.DistributionofFederalPellGrantRecipientsbyTypeofInstitution,AwardYear2012-2013.................................4Figure2.FederalPellGrantProgramVolumeinCurrentandInflation-AdjustedDollars(inMillions),2003-2004to2013-2014.....................................................................................................................................................5

Figure3.MaximumPellGrantAwardinCurrentandInflation-AdjustedDollars,2004-2005to2014-2015.........................5Figure4.DistributionofFSEOGRecipientsbyTypeofInstitution,AwardYear2012-2013...................................................7Figure5.FSEOGProgramVolumeinCurrentandInflationAdjustedDollars(inMillions),2003-2004to2013-2014.....................................................................................................................................................7

Figure6.DistributionofFWSRecipientsbyTypeofInstitution,AwardYear2012-2013.....................................................9Figure7.FWSProgramVolumeinCurrentandInflation-AdjustedDollars(inMillions),2003-2004to2013-2014.....................................................................................................................................................9

Figure8.DistributionofPerkinsLoanRecipientsbyTypeofInstitution,AwardYear2012-2013.......................................11Figure9.FederalPerkinsLoanProgramVolumeinCurrentandInflation-AdjustedDollars(inMillions),2003-2004to2013-2014..............................................................................................................................11

Figure10.FederalStudentLoanVolume(Inflation-AdjustedDollars,inMillions),2003-2004to2013-2014.....................16

©2015-NationalStudentAidProfile:Overviewof2015FederalPrograms 1

Overview DearReader:NASFAA’sNationalProfileservesasahelpfulresourcedocumentonthebasicsofthefederalstudentfinancialaidprogramsthatprovidefundingtomillionsofstudentseachyear.Thisinformationismoreimportantthanever,asdatafromtheU.S.DepartmentofEducation(ED)showthatthenumberofstudentsapplyingforfederalfinancialassistancerosefromaround19.4millionin2007-2008tonearly31.4millioninthe2011-2012awardyear,a62percentincreaseoverfiveyears.TheupcomingreauthorizationoftheHigherEducationAct(HEA)alsoheightenstheinterestinthefederalstudentaidprograms,withmanyexaminingthecurrentprogramsanddiscussingproposalstomakethemmoreeffective.Inthisprofile,youwillfindanoverviewofthefollowingprograms:

• TheFederalPellGrantProgram.

• TheFederalSupplementalEducationalOpportunityGrant(FSEOG)Program.

• TheFederalWork-StudyProgram.

• TheFederalPerkinsLoanProgram.

• TheFederalDirectSubsidizedandUnsubsidizedLoanPrograms.

• TheDirectPLUSLoanProgram.Foreachprogram,inadditiontoabasicdescription,youwillfindthemostup-to-datedataandinformationonthefollowing:

• NumberofRecipients.

• TotalVolumeofAwards.

• FederalFundingLevels.

• DistributionbyFamilyIncome.Inaddition,weprovideanappropriationsupdateonTitleIVprogramfundingforthe2015-2016awardyear.Itisourhopethatyoufindthisinformationtobeahelpfuldeskreferenceofthefederalstudentaidprograms.Asalways,ifyouhaveanyquestionsorwouldlikemoreinformation,pleasefeelfreetoreachouttoNASFAAatpolicy@nasfaa.orgor202.785.0453.Sincerely,TheNASFAAPolicyTeam

2 ©2015NationalAssociationofStudentFinancialAidAdministrators

Table 1. Summary Descriptions of the Major Federal Student Aid Programs

ProgramName ProgramDescriptionNumberofRecipientsandAverageAwards

Volume2013-2014

FederalPellGrant Providesgrantstolow-incomeundergraduateswhohavenotyetearnedafirstbachelor’sdegreewiththegreatestdemonstratedfinancialneed.The2014-2015maximumawardwas$5,730;minimumawardwas$587.For2015-2016,themaximumawardis$5,775andthestatutoryminimumis$577,butbecausemidpointsareusedforboththeestimatedfamilycontribution(EFC)columnsandthecostofattendance(COA)rowsinconstructingtheschedules,theactual2015-2016AwardYearminimumawardamountforafull-timestudentis$588.

Approximately9.4millionrecipientsin2012-2013.Averageawardwas$3,555.Morethan74percentofrecipientshadfamilyincomeoflessthan$30,000.

ThetotalvolumeforPellGrantswas$35.2billion.

FederalSupplementalEducationalOpportunityGrant(FSEOG)

Providesgrantstolow-incomeundergraduateswiththegreatestdemonstratedfinancialneed.Maximumawardis$4,000;minimumawardis$100.PrioritymustbegiventostudentswhoreceiveFederalPellGrants,andawardsmustbemadefirsttostudentswhohavethelowestexpectedfamilycontributions.Atleast25percentofFSEOGawardsmustcomefrominstitutionalresources.

Approximately1.6millionrecipientsin2012-2013.Averageawardwas$599.Seventypercentofdependentrecipientscamefromfamilieswithanincomeoflessthan$30,000.

Thetotalfederalvolumewas$733million.

FederalWork-Study(FWS)

Providespart-timejobstofinanciallyneedyundergraduateandgraduate/professionalstudents.Jobsmust,tothebestextentpossible,berelatedtostudents’academicorcareergoals.Institutionsmustgenerallycontributeatleast25percentofwagespaid.

Approximately694,000recipientsin2012-2013.Theaverageawardwas$1,673.Ofdependentundergraduaterecipients,46percenthadfamilyincomesbelow$42,000.

Thetotalfederalvolumewas$975million.

FederalPerkinsLoan Distributeslow-interestloans(5percent)toundergraduateandgraduate/professionalstudentswithfinancialneed;priorityisgiventothosewithexceptionalneed.Borrowingissubjecttoannualandaggregateloanlimits.Borrowersusuallyrepaytheloansdirectlytotheirpostsecondaryinstitutions;repaymentsareusedtomakenewloans.Institutionsmatchatleast33percentoftheirfederalprogramallocations.Loanrepaymentsmaybecancelledforborrowerswhoperformcertainvolunteer,military,healthcare,orotherservices.

Approximately500,000recipientsin2012-2013.Averageawardwas$2,014.Thirty-fourpercentofdependentrecipientscamefromfamilieswithanincomeoflessthan$30,000,and74percentofindependentrecipientshadanincomeoflessthan$20,000.

Newloansweremadeforatotalof$1billionfrominstitutions’revolvingfunds.


Table 1. Summary Descriptions of the Major Federal Student Aid Programs (continued)

ProgramName ProgramDescriptionNumberofRecipientsandAverageAwards

Volume2013-2014

DirectSubsidizedLoan

Provideslow-interestloanstofinanciallyneedyundergraduatestudents.Interestontheloansispaidbythegovernmentwhileborrowersareinschool,inthegraceperiod,andduringdeferment.Borrowingissubjecttoannualandaggregateloanlimits.Borrowersbeginrepayingloanssixmonthsafterceasingatleasthalf-timeenrollmentinpostsecondaryeducation,unlessborrowerqualifiesfordeferment.Cancellationofloansisavailableforemploymentincertaindesignatedfields,undercertainconditions.

Approximately6.9millionborrowersin2013-2014.Averageloanof$3,677.

Thetotalloanvolumewas$25.4billion.

DirectUnsubsidizedLoan

Provideslow-interestloanstoundergraduateandgraduate/professionalstudents.Loansareprovidedregardlessofborrowers’incomeorfinancialneed,aslongastotalaiddoesnotexceedcostofattendance.Recipientsarechargedinterestontheloansatalltimes.Borrowingissubjecttoannualandaggregateloanlimits;limitsarehigherforindependentstudents.Unlessborrowersqualifyfordeferment,loanrepaymentbeginssixmonthsaftertheyceaseatleasthalf-timeenrollmentinpostsecondaryeducation.Cancellationofloansisavailableforemploymentincertaindesignatedfields,undercertainconditions.

Approximately7.9millionborrowersin2013-2014.Averageloanof$4,109forundergraduatestudentsand$17,562forgraduatestudents.

Thetotalloanvolumewas$51.9billion.

DirectPLUSLoan Providesloansto(1)theparentsofdependentundergraduates,asdefinedbyHEA,and(2)graduateandprofessionalstudents.Borrowersmayobtainloansuptothefullamountofthecostofeducation,minusanyaidstudentsreceivefromothersources.Loansareprovidedregardlessofincome,butborrowersmustpassacreditcheckorobtainanendorser.

Approximately704,000parentborrowersin2013-2014.Averageloanof$14,174.Inthesameawardyear,anestimated343,000graduate/professionalstudentsborrowedanaverageof$21,849inGradPLUSloans.

PLUSborrowers(parentsandgraduate/professionalstudents)received$17.5billion.


The Federal Pell Grant Program ProgramDescription.TheFederalPellGrantProgramisthe“foundational”federalstudentaidprogram.Theprogramprovidesgrantstofinanciallyneedyundergraduatestudentswhohavenotyetearnedtheirfirstbachelor’sdegreetohelppaythecostsofattendingpostsecondaryinstitutions.(Inverylimitedcircumstances,post-baccalaureatestudentsinteachereducationprogramsmayalsoqualifyforPellGrants.)Schoolsmustdetermineastudent’sFederalPellGranteligibilitybeforecalculatingeligibilityforotherfederalstudentaidprograms.DuringtheannualCongressionalappropriationsprocess,theminimumandmaximumPellGrantawardlevelisestablishedfortheupcomingawardyear.Inawardyear2014-2015,grantsrangedbetween$587and$5,730.Inawardyear2015-2016grantsrangefrom$588to$5,775.Theamountsstudentsreceivearebasedontheireducationalcostsandthefamily’sabilitytocontributetocollegecosts.Figure 1. Distribution of Pell Grant Recipients by Type of Institution, Award Year 2012-2013

Source:U.S.DepartmentofEducation,FederalPellGrantProgramEnd-of-yearReport,2012-2013.Table 2. Number and Distribution of Pell Grant Recipients by Family Income Level, Award Year 2012-2013

FamilyIncomeLevel Number Percentage$6,000orless 2,189,575 24.4%$6,001to$15,000 1,941,541 21.7%$15,001to$20,000 1,049,422 11.7%$20,001to$30,000 1,449,745 16.2%$30,001to$40,000 960,787 10.7%$40,001andover 1,367,643 15.3%Total 8,958,713 100%

Source:U.S.DepartmentofEducation,FederalPellGrantProgramEnd-of-yearReport,2012-2013.

30%($2.7m)

36%($3.2m)

13%($1.1m)

21%($1.9m)

Public4-year

Public2-year

Privatenonprofit

Proprietary


Figure 2: Federal Pell Grant Program Volume in Current and Inflation Adjusted Dollars (in Millions), 2003-2004 to 2013-2014.

Source:TheCollegeBoard,TrendsinStudentAid,2014.Figure 3: Maximum Pell Grant Award in Current and Inflation-Adjusted Dollars, 2004-2005 to 2014-2015.

Source:U.S.DepartmentofEducation,FederalPellGrantProgramEnd-of-yearReport,2012-2013;CollegeBoard,TrendsinStudentAid,2014.Inflation-adjustedto2014dollarscalculatedbyNASFAA,usingtheConsumerPriceIndex(CPI-U)fortheJulybeginningtheacademicyear.

$12,708$13,150$12,693

$12,817$14,676

$18,291

$29,992

$35,677$33,575

$32,061$33,728

$16,142$16,218$15,174$14,713$16,459

$19,425

$32,533

$38,227

$34,716$32,690$33,728

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Current

Inflamon-adjusted

$4,050 $4,050 $4,050$4,310

$4,731

$5,350 $5,550 $5,550 $5,550$5,645 $5,730

$5,095 $4,938 $4,742 $4,930 $5,124

$5,919 $6,065 $5,853 $5,772 $5,757 $5,730

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Current

Inflamon-adjusted


Campus-Based Aid Programs EDrequiresschoolstocontributeaportionofthefundingforcampus-basedaidprograms,butfinancialaidadministratorsateachparticipatingpostsecondaryinstitutionmustusefederalprogramguidelinestodeterminewhichstudentswillreceiveawardsandhowmuchtheywillreceive.Theseprogramsinclude:theFederalSupplementalEducationalOpportunityGrantProgram,theFederalWork-StudyProgram,andtheFederalPerkinsLoanProgram.

The Federal Supplemental Educational Opportunity Grant Program ProgramDescription.TheFederalSupplementalEducationalOpportunityGrant(FSEOG)Programprovidesgrantstofinanciallyneedyundergraduatesatpostsecondaryinstitutions.FinancialassistancefromtheFSEOGProgramgenerallysupplementstheaidstudentsreceivefromothersources.Studentsmusthave“exceptional”financialneedtoreceiveFSEOGawards.SchoolsmustgiveprioritytostudentswhoreceiveFederalPellGrants,andawardsmustfirstbemadetostudentswiththelowestexpectedfamilycontributions(EFC)-thatis,startingwithazeroEFCandthenmovingupward.TheminimumFSEOGawardis$100,andthemaximumis$4,000.Institutionsthatparticipateintheprogramreceivefederalallocationstodistributeawards.Theseinstitutionsmustmatchtheirfederalallocationswithfundsfromtheirownresources,sothatnomorethan75percentofFSEOGawardsrepresentthefederalshare.Table 3a. Number of Dependent Undergraduates Who Received Federal Supplemental Educational Opportunity Grants by Family Income Level, Award Year 2012-2013

FamilyIncomeLevel RecipientsRecipientsPercentage

TotalFSEOGDollars*

DollarsPercentage

AverageFSEOGAward

Lessthan$6,000 197,995 24.7% $143,227,991 23.6% $723$6,000to$11,999 77,041 9.6% $55,949,312 9.2% $726$12,000to$23,999 221,543 27.6% $164,353,071 27.0% $742$24,000to$29,999 89,224 11.1% $69,167,141 11.4% $775$30,000to$41,999 110,531 13.8% $88,606,371 14.6% $802$42,000to$59,999 77,378 9.6% $62,751,878 10.3% $811$60,000andover 29,449 3.7% $23,887,163 3.9% $811Total* 803,161 100.0% $607,942,927 100.0% $757

Table 3b. Number of Independent Undergraduates Who Received Federal Supplemental Educational Opportunity Grants by Family Income Level, Award Year 2012-2013


TotalFSEOGDollars*

DollarsPercentage

AverageFSEOGAward

Lessthan$2,000 248,896 27.5% $123,744,384 29.1% $497$2,000to$3,999 59,315 6.5% $29,971,747 7.0% $505$4,000to$7,999 118,756 13.1% $58,262,580 13.7% $491$8,000to$11,999 115,452 12.7% $53,563,050 12.6% $464$12,000to$15,999 87,038 9.6% $38,289,679 9.0% $440$16,000to$19,999 72,730 8.0% $31,176,930 7.3% $429$20,000andover 204,447 22.6% $90,333,621 21.2% $442Total* 906,634 100.0% $425,341,991 100.0% $469

*Totaldollaramountsincludefederalfundsandinstitutionalmatchingfunds.SourceforTables3aand3b:U.S.DepartmentofEducation,FederalCampus-BasedProgramsDataBook,2014.


Figure 4. Distribution of FSEOG Recipients by Type of Institution, Award Year 2012-2013

Source:U.S.DepartmentofEducation,FederalCampus-BasedProgramsDataBook,2014.Figure 5. FSEOG Program Volume in Current and Inflation-Adjusted Dollars (in Millions), 2003-2004 to 2013-2014

Source:TheCollegeBoard,TrendsinStudentAid,2014.

25%

27%

1%

21%

12%

14%

Public2-year

Public4-year

Privatenonprofit2-year


Proprietary2-year

Proprietary4-year

$759 $770 $778 $771 $771 $757 $736 $757 $736 $735 $733

$964 $950 $931$885 $864

$804 $798 $811$761 $749 $733

$0

$200

$400

$600

$800

$1,000

$1,200

Current

Inflamon-adjusted


The Federal Work-Study Program ProgramDescription.TheFederalWork-Study(FWS)Programprovidespart-timejobstoundergraduate,graduate,andprofessionalstudentsatpostsecondaryinstitutions.Generally,aidfromtheFWSProgramsupplementstheassistancestudentsreceivefromFederalPellGrantsandothersources.TheFWSProgramisaneed-basedprogram;thatis,recipientsmusthavedemonstratedfinancialneed.Awardamountsmustbebasedondemonstratedfinancialneed,thenumberofhoursstudentsareexpectedtoworkeachweek,andtheanticipatedhourlywage.FormostFWSjobs,thefederalprogramfundsareusedtopay75percentofthestudents’wages.Theremaining25percentisprovidedbytheinstitutionorthestudents’employers.(Privatefor-profitbusinessesthatemployFWSrecipientsmustpayatleast50percentofstudents’wagesfromtheirownresources.)Alowernon-federalshareispermittedunderspecificlimitedconditions.Table 4a. Number of Dependent Undergraduates Who Received Federal Work-Study Awards by Family Income Level, Award Year 2012-2013


TotalFWSDollars*

DollarsPercentage

AverageFWSAward

Lessthan$6,000 40,410 7.7% $66,120,799 8.2% $1,636$6,000to$11,999 24,929 4.8% $42,096,331 5.2% $1,689$12,000to$23,999 74,482 14.2% $125,284,587 15.6% $1,682$24,000to$29,999 36,436 7.0% $60,497,525 7.5% $1,660$30,000to$41,999 65,080 12.4% $106,211,280 13.2% $1,632$42,000to$59,999 80,497 15.4% $126,299,960 15.7% $1,569$60,000andover 200,978 38.4% $277,991,521 34.6% $1,383Total* 522,812 100.0% $804,502,003 100.0% $1,539

Table 4b. Number of Independent Undergraduates Who Received Federal Work-Study Awards by Family Income Level, Award Year 2012-2013


TotalFWSDollars*

DollarsPercentage

AverageFWSAward

Lessthan$2,000 38,115 31.2% $70,809,991 30.1% $1,858$2,000to$3,999 11,924 9.8% $22,580,085 9.6% $1,894$4,000to$7,999 20,190 16.5% $41,020,047 17.4% $2,032$8,000to$11,999 15,154 12.4% $31,148,788 13.2% $2,055$12,000to$15,999 10,571 8.7% $21,088,403 9.0% $1,995$16,000to$19,999 7,032 5.8% $13,717,733 5.8% $1,951$20,000andover 19,105 15.6% $34,961,885 14.9% $1,830Total** 122,091 100.0% $235,326,932 100.0% $1,927



Figure 6. Distribution of FWS Recipients by Type of Institution, Award Year 2012-2013

Source:U.S.DepartmentofEducation,FederalCampus-BasedProgramsDataBook,2014.Figure 7. FWS Program Volume in Current and Inflation-Adjusted Dollars (in Millions), 2003-2004 to 2013-2014


11.1%

32.2%

0.4%

52.3%

1.6% 2.4%

Public2-year

Public4-year



Proprietary2-year

Proprietary4-year

$1,000 $994 $984 $974 $974 $974 $972 $974 $972 $965 $975

$1,271$1,226

$1,176$1,118 $1,092

$1,034 $1,055 $1,044$1,005 $984 $975

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Current

Inflamon-adjusted


The Federal Perkins Loan Program ProgramDescription.TheFederalPerkinsLoanProgramprovideslow-interestloanstofinanciallyneedyundergraduate,graduate,andprofessionalstudents.UnlikeFederalPellGrants,FSEOG,andFWSawards,studentsmustrepayFederalPerkinsLoansaftertheygraduate,leave,orfallbelowhalf-timeattendancestatusattheirpostsecondaryinstitutions(attendancestatusisdeterminedateachinstitution).Loanrepaymentsareusuallymadedirectlytotheborrowers’school.Interestontheloanaccruesatarateof5percentperyear.However,interestdoesnotbegintoaccrueuntilborrowersenterrepayment,whichmaybedeferredforapprovedreasons.Themaximumamountstudentsmayborrowisbasedontheiracademicgradelevel:• Undergraduatestudentsmayborrowupto$5,500annually• Graduateandprofessionalstudentsmayborrowupto$8,000annually.TheFederalPerkinsLoanProgramisauthorizedthroughSeptember30,2015.IfCongressdoesnotenactlegislationextendingtheauthorizationoftheprogrambythatdate,theprogramwillexpireonOctober1,2015.Iftheprogramexpires,thestatuteallowsforlimited“grandfathering”socurrentPerkinsLoanrecipientsmaycontinuetoreceivenewPerkinsLoansafterSeptember30,2015.Forthepastfiveyears,budgetrequestsfromPresidentObamaproposedanewPerkinsLoanProgram.ThisproposalwouldincreasethevolumeofthePerkinsLoanProgramsignificantlytoallowmoreschoolstoparticipateintheprogram,maketheseloansunsubsidizedwithmarket-basedinterestrates(withallothertermsandconditionsofanunsubsidizedDirectLoan),andprovidepostsecondaryinstitutionsauthoritytochoosePerkinsLoanrecipients.Table 5a. Number of Dependent Undergraduates Who Received Perkins Loans by Family Income Level, Award Year 2012-2013


TotalPerkinsDollars*

DollarsPercentage

AveragePerkinsAward


Table 5b. Number of Independent Undergraduates Who Received Perkins Loans by Family Income Level, Award Year 2012-2013


TotalPerkinsDollars*

DollarsPercentage

AveragePerkinsAward




Figure 8. Distribution of Perkins Loan Recipients by Type of Institution, Award Year 2012-2013

Source:U.S.DepartmentofEducation,FederalCampus-BasedProgramsDataBook,2014.Figure 9. Federal Perkins Loan Program Volume in Current and Inflation-Adjusted Dollars (in Millions), 2003-2004 to 2013-2014


0%

48%

0%

47%

1%

4%

Public2-year

Public4-year



Proprietary2-year

Proprietary4-year

$1,639 $1,652 $1,594 $1,618

$1,383

$961$818 $857

$949 $1,010 $1,011

$2,081 $2,037$1,905 $1,858

$1,551

$1,021$888 $918 $981 $1,030 $1,011

$0

$500

$1,000

$1,500

$2,000

$2,500

Current

Inflamon-adjusted


The Federal Family Education Loan Program and the William D. Ford Direct Student Loan Program ProgramDescription.BeforeJuly1,2010,TitleIVoftheHEAauthorizedtwoprogramsfordistributingloanstostudentsandparentsofdependentundergraduatestudents.Whilethetermsoftheloansranparallelbetweenthetwoprograms,thedifferencewasthesourceoffunding.TheFederalFamilyEducationLoan(FFEL)Program,formerlyknownastheGuaranteedStudentLoanProgram,utilizedprivateandnonprofitsectorfundingunderasystemoffederalguaranteesandsupport.TheFFELProgramceasedoperationsinJuly2010(otherthancollectionandservicingofoutstandingloans)infavorofmaintainingjustoneloanprogram,theWilliamD.FordDirectStudentLoanProgram,whichisfederallyfundedandadministeredbyED.TheDirectLoanProgramcontinuestoprovidelow-interestloanstoundergraduateandgraduate/professionalstudentsandparentsofdependentundergraduatestudentstohelppaythecostsofattendingpostsecondaryinstitutions.Loansare“entitlements,”whichmeansthatalleligibleandqualifiedborrowersmayreceivetheprogramfundsandbenefits,butborrowersaresubjecttoannualandaggregatelimits.TheDirectLoanProgramisanumbrellaforfourloansmadeforundergraduateandgraduatestudy(aswastheFFELProgram):

• DirectSubsidizedLoans(alsoreferredtoasSubsidizedStaffordLoans)

• DirectUnsubsidizedLoans(alsoreferredtoasUnsubsidizedStaffordLoans)

• PLUSLoans,whicharemadetoparentsofdependentstudentsandtograduateandprofessionalstudents

• ConsolidationLoans,arepaymentoptionratherthanaloanmadeforattendanceataninstitutionBorrowersmaybechargedafeetohelppayaportionofthecostsofadministeringtheprograms.DirectLoanfeeswereoriginallychargedat4percentofloanprincipal,buthavegraduallybeenreducedasaresultoftheongoingsequestration1reductionstomandatoryprograms.Thefollowingloanfeesaredeductedfromeachborrower’sloandisbursement:

Loansfirstdisbursedonorafter

Oct.1,2014,toSept.30,2015 Oct.1,2015,toSept.30,2016

SubsidizedandUnsubsidizedDirectLoans 1.073 1.068

PLUSLoans 4.292 4.272

Interestratestructureshavevariedgreatlyovertheyears,sometimesbeingvariablewithamaximumcap,sometimesfixed.AswrittenintheBipartisanStudentLoanCertaintyActof2013,allDirectLoans,exceptforDirectConsolidationLoans,withafirstdisbursementdateonorafterJuly1,2013,havevariablefixed,market-basedinterestrates.InterestratesfornewDirectLoanswillchangeeveryJuly1basedonmarketratesandthenremainfixedforthelifeofthatloan.AllinterestrateswillapplytoloansdisbursedonorafterJuly1ofayeartoJune30ofthefollowingyearonly.Thislawwillalsoprovideprotectiontoconsumersfrommarketspikesbyplacingratecapsof:

• 8.25percentonDirectSubsidizedLoansandDirectUnsubsidizedLoansforundergraduatestudents,

• 9.5percentforDirectUnsubsidizedLoansforgraduate/professionalstudents,and

• 10.5percentforParent/GraduatePLUSLoans.

1TheBudgetControlActof2011mandatedfederalspendingcutsthroughaprocesscalledsequestrationtoanumberoffederalprograms,includingcertainTitleIVaidprograms.


EDcalculatestheinterestratesfortheseloansusingabase10-yearTreasuryNoteIndexplusanadd-onamountforeachloanprogram.Thefollowingchartoutlinestheinterestratesforthelastthreeawardyears:

TreasuryNoteIndex Add-OnAmount InterestRate

FederalDirectSubsidizedandUnsubsidizedLoans:UndergraduateStudents

2013-2014 1.81 2.05 3.86

2014-2015 2.612 2.05 4.66

2015-2016 2.237 2.05 4.29

FederalDirectUnsubsidizedLoans:GraduateStudents

2013-2014 1.81 3.6 5.41

2014-2015 2.612 3.6 6.21

2015-2016 2.237 3.6 5.84

FederalDirectPLUSLoans:ParentsandGraduate/ProfessionalStudents

2013-2014 1.81 4.6 6.41

2014-2015 2.612 4.6 7.21

2015-2016 2.237 4.6 6.84SubsidizedLoans:DirectSubsidizedLoansareprovidedtoundergraduatestudentsbasedontheirdemonstratedfinancialneed.Annualandaggregatelimitsapplytoawardamounts.Studentsdonothavetopaytheaccruedinterestonsubsidizedloanswhiletheyareenrolledattheirinstitutionsatleasthalf-time.Interestontheloansbeginstoaccrueassoonasborrowersreceivethefunds.However,aportionofthefederalappropriationforsubsidizedloansisusedtopaytheaccruedinterestontheborrowers’behalf.Thisprovisioninthesubsidizedloanprogramiscommonlyreferredtoasthe“in-schoolinterestsubsidy”andwasalsoavailabletoneedygraduatestudentspriortoJuly1,2012.Repaymentbeginsfollowingasix-month“graceperiod”afterthestudentisnolongerenrolledatleasthalf-time.Theinterestsubsidyextendsthroughthegraceperiod.However,thatprovisionwastemporarilysuspendedfornewloansforwhichthefirstdisbursementwasmadeonorafterJuly1,2012,andbeforeJuly1,2014.Borrowersareresponsibleforpayingaccruinginterestoncetheyentertherepaymentperiod,beginningattheendofthegraceperiod,exceptduringauthorizedperiodsofdeferment.UnsubsidizedLoans:ThesecondtypeofDirectstudentloan,theunsubsidizedloan,workssimilarlytosubsidizedloans,butborrowersareresponsibleforallinterestthataccrues.Eligibilityforunsubsidizedloansisnotbasedonstudents’financialneed.Thatis,studentsmayreceivetheseloansregardlessoftheirincomesorassets,andmayusethemtoreplacetheexpectedfamilycontribution.Annualandaggregatelimitsapplytoawardamounts.Studentswhoreceiveunsubsidizedloansdonothaveanin-schoolinterestsubsidy.Theseborrowersarechargedtheaccruedinterestontheseloanswhiletheyareenrolled.Accruedinterestmaybepaidduringperiodsofenrollment,ormaybecapitalized(addedtotheprincipalbalanceoftheloans).Interestontheseloansmustalsobepaidorcapitalizedduringanydefermentperiods.


LoanLimits.TheamountastudentmayborrowinsubsidizedfundsistheresultofsubtractingotheraidandtheEFCfromthecostofattendance(COA),ortheapplicableannualloanlimit,whicheverisless.Theannualmaximumamountofloansstudentsmayborrowvariesbyacademicgradelevel.AsofJuly1,2007,theannualloanlimitsareasfollows:

DependentStudents IndependentStudents(andstudentswhoseparentscannotobtainaPLUSloan)

FirstYearUndergraduateStudents

$5,500Nomorethan$3,500canbesubsidized.


SecondYearUndergraduateStudents



ThirdYearandBeyondUndergraduateStudents



Graduate/ProfessionalStudents N/A $20,500

AsofJuly1,2012,unsubsidizedfundsonly.

AsofJuly1,2007,theaggregateloanlimitsareasfollows:

DependentStudents IndependentStudents(andstudentswhoseparentscannotobtainaPLUSloan)

UndergraduateStudents $31,000Nomorethan$23,000canbesubsidized.


GraduateStudents N/A$138,500

Nomorethan$65,500canbesubsidized.Undergraduateborrowingcountstowardgraduateaggregatelimit.

PLUS:ThePLUSLoanProgramprovidesloanstotheparentsofdependentundergraduatesandtostudentswhoareingraduateorprofessionalprograms(whoare,byfederaldefinition,independentoftheirparents).Parentsmustusetheloanfundstopaytheirchildren’shighereducationcosts.ToqualifyforaPLUSLoan,borrowersmaynothaveanadversecredithistory(credithistoryisnotconsideredforsubsidizedandunsubsidizedloans).BorrowerswithadversecredithistoriescanobtainaloaniftheyprovideanendorserorappealthecreditdecisionwithED.PLUSLoansarelimitedtothedifferencebetweenthestudent’sCOAandotheranticipatedfinancialaid;therearenoabsoluteannualoraggregatelimits.

Table 6. Undergraduates Who Received Federal Subsidized Direct Loans by Family Income Level, Award Year 2011-2012

AdjustedGrossIncome(AGI) Recipients(Estimated) Percent AverageAwardLessthan$20,000 2,919,603 35.3% $3,333$20,000to$39,999 1,900,367 23.0% $3,498$40,000to$59,999 964,669 11.7% $3,621$60,000to$79,999 739,863 8.9% $3,649$80,000to$99,999 599,997 7.2% $3,621$100,000andover 1,152,390 13.9% $3,516Total 8,276,889 100.0% $3,468


Table 7. Undergraduates Who Received Federal Unsubsidized Direct Loans by Family Income Level, Award Year 2011-2012

AdjustedGrossIncome(AGI) Recipients(Estimated) Percent AverageAwardLessthan$20,000 2,830,145 36.6% $4,025$20,000to$39,999 1,566,876 20.3% $3,793$40,000to$59,999 886,743 11.5% $3,504$60,000to$79,999 748,107 9.7% $3,345$80,000to$99,999 593,312 7.7% $3,738$100,000andover 1,104,240 14.3% $4,665Total 7,723,559 100.1% $3,922Table 8. Undergraduates Whose Parents Received Federal PLUS Loans by Family Income Level, Award Year 2011-2012

AdjustedGrossIncome(AGI) Recipients(Estimated) Percent AverageAwardLessthan$20,000 113,856 11.0% $8,129$20,000to$39,999 137,631 13.3% $8,968$40,000to$59,999 142,416 13.7% $11,011$60,000to$79,999 154,568 14.9% $11,650$80,000to$99,999 150,417 14.5% $12,219$100,000andover 340,260 32.8% $15,279Total 1,037,493 100.2% $12,089Table 9. Graduate/Professional Students Who Received Federal PLUS Loans by Family Income Level, Award Year 2011-2012

AdjustedGrossIncome(AGI) Recipients(Estimated) Percent AverageAwardLessthan$20,000 229,286 62.9% $19,267$20,000to$39,999 62,381 17.1% $18,674$40,000to$59,999 35,671 9.8% $14,983$60,000to$79,999 15,026 4.1% $16,199$80,000to$99,999 9,067 2.5% $17,813$100,000andover 12,116 3.3% $18,449Total 364,538 99.7% $18,554

SourceforTables6-9:U.S.DepartmentofEducation,NationalCenterforEducationStatistics,2011-2012NationalPostsecondaryStudentAidStudy(NPSAS:12)


Figure 10. Federal Student Loan Volume (Inflation-Adjusted Dollars, in Millions), 2003-2004 to 2013-2014


Federal Need Analysis Description:TheapplicationforallTitleIVprogramsistheFreeApplicationforFederalStudentAid(FAFSA),whichcollectsdemographic,income,andassetinformationfromaidapplicantsandtheirfamilies.EDusesthisinformationtoconfirmstudents’generaleligibilitytoreceiveTitleIVfundsandcalculatesanindex,calledtheExpectedFamilyContribution(EFC),thatschoolsuseasoneofseveralfactorstodeterminetheamountoffinancialaidastudentmayreceiveduringagivenawardyear.TheEFCisdeterminedbyaneedanalysisformulaestablishedunderTitleIVoftheHigherEducationAct;theformulaiscalledtheFederalMethodology(FM).ParentsofdependentstudentsareexpectedtoprovidefinancialinformationontheFAFSAandtocontributesomeamount,iftheyareable,tothefinancingoftheirchild’seducation.Use:FinancialaidadministratorsusetheEFCandotherinformationtodeterminewhichstudentswillreceivefederalstudentaidauthorizedunderTitleIVoftheHEAandtheamountstheywillreceivefromtheseprograms.Studentsareeligibletoreceiveneed-basedfederalstudentaid(FederalPellGrant,FWS,FSEOG,FederalPerkinsLoans,andDirectSubsidizedLoans)onlyifthesumoftheEFCandotherestimatedfinancialassistanceislessthanthetotalcostofattendance(COA).TheCOAincludestuitionandfeescharges,estimatedlivingexpenses,booksandeducationalsupplies,transportationtoandfromthepostsecondaryinstitution,andothermiscellaneousexpenses.

$27,995 $29,385 $29,217 $28,713

$32,632

$35,075

$41,295 $43,462

$41,940

$28,354

$25,408

$24,896$26,943$28,224 $27,950

$30,716

$42,929

$50,513 $50,436$48,555

$57,658

$51,898

$7,917 $9,081 $9,783$11,733$12,082 $12,759

$15,823$18,778 $19,187 $17,791 $17,457

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

StaffordSubsidized

StaffordUnsubsidized

PLUS


Fiscal Year 2015 Budget and Appropriations Update Eachyear,Congressmustgothroughtheprocessofdeterminingfundinglevelsformostofthefederalstudentaidprograms.Fiscalyear(FY)2015fundingforthe2015-2016awardyearwasfinalizedbyCongressinDecember2014.Giventhefiscalenvironmentofausterityandsequestration2,thefederalstudentaidprogramsfaredrelativelywellinthebudgetprocess,withsomeprogramsevenreceivingmodestincreases.Ashasbeenthecaseoverthepastseveralyears,CongressshowedtheircommitmenttofundingthemaximumPellGrant.Thebillestablishedthediscretionaryportionofthemaximumawardat$4,860.ThechartbelowshowsthatwhencombinedwiththescheduledmandatoryPelladd-onof$915,thetotalmaximumawardforthe2015-2016awardyearis$5,775,a$45increaseoverthe2014-2015amount.ThechartbelowhighlightsPellGrantfundingoverthelastseveralyears.

Program FY13 FY14 FY15 ChangefromFY14toFY15

PellGrant(discretionary) $22,778,352,000 $22,778,352,000 $22,475,352,000 -$303,000,000

PellGrantmaximumaward $5,645 $5,730 $5,775 +$45

WhiletheFederalSupplementalEducationalOpportunityGrant(FSEOG)Programwaslevelfunded,thespendingpackageprovideda$15millionincreasetotheFederalWork-StudyProgram.Thiswasasmallbutwelcomeboostinatimewhenmanyprogramsreceivedcuts.ThefundingforFSEOGandFWSarehighlightedinthefollowingchart.

Program FY13 FY14 FY15 ChangefromFY14toFY15

FSEOG $696,175,000 $733,130,000 $733,130,000 $0

FWS $925,595,000 $974,728,000 $989,728,000 +$15,000,000

Thehighereducationcommunitycontinuestoadvocateforadequatefundingofthefederalstudentaidprograms,particularlyduringthistimeofbroadfiscalausterityandwhenwecontinuetooperateunderthesequestration.

Conclusion SinceenactmentoftheHEAin1965,federalfinancialaidhasbeenacentralandcriticalpathwayforcollegeaccess.Giventheimportanceoffederalfinancialaid,thisbookletservesasaresourcedescribingsevenprominentTitleIVprograms.Whilethesefinancialaidprogramsmayhavechangedovertime,thegeneralprinciplesofeachprogramhavestayedthesame.NASFAAhopestheinformationinthisbookletishelpfultoyou.Youmayfindamoredetailedversionofthisdocumentonlineatwww.NASFAA.org.Wealsohaveproducedotherpublicationsthathelpstudentsandfamiliesfindwaystopayforpostsecondaryeducation.Pleasecontactusifwecanprovideanyadditionalinformationtoyouatpolicy@nasfaa.orgor202.785.0453.

2TheBudgetControlActof2011mandatedfederalspendingcutsthroughaprocesscalledsequestrationtoanumberoffederalprograms,includingcertainTitleIVaidprograms.

The National Associationof Student Financial Aid

Administrators (NASFAA)provides professional

development for financialaid administrators; advocates

for public policies that increasestudent access and success;serves as a forum on student

financial aid issues, and iscommitted to diversity

throughout all activities.

1101 CONNECTICUT AVENUE NW, SUITE 1100WASHINGTON, DC 20036-4303

202.785.0453 FAX. 202.785.1487 WWW.NASFAA.ORG

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