The State of Financial Aid Patsy Collins Director, SMMC Sam Houston State University

Federal Title IV Trends Increased Emphasis on Timely Graduation Reduction in Federal Aid Programs Additional Cost to Students Increased Emphasis on Default Loan Prevention

Satisfactory Academic Progress Undergraduate GPA Minimum 2.0 Overall Completion Rate* 75% of Attempted Hours Maximum Timeframe 150% of the Credit Hours Required for Graduation * Recent Program Change – From annual to overall

Pell Grant Increased Annual Maximum Amount: $6,465 Expanded EFC Range : $0 - $4, : $0 - $5,081 Decreased Lifetime Eligibility* Equivalent of 6 full time years * Recent Program Change – From 18 semesters to 12 semesters

TEACH Grant New Annual Amount: $3,760* (Reduced from $4,000 annually)

Federal Direct Loans Increase in Loan Interest Rate 6.8% (Old rate - 3.4%) Graduate Students No longer eligible for subsidized loans (Increases student loan debt approx. $2,000-$4,000 depending on the length of the program)

Federal Direct Loans (Cont’d) Loan Origination Fees Removal of Up-Front Rebates Student Origination Fee – 1% (Rebate was.5%) 1.05 % Anticipated New Fee Due to Sequestration PLUS Origination Fee – 4% (Rebate was 1.5%) 4.2 % Anticipated New Fee Percentage Due to Sequestration (Borrowers were eligible to keep the rebate if they made their first 12 months of payments on time once they entered repayment.)

Federal Direct Loans (Cont’d) 150% Limit for Direct Subsidized Loans MAP – 21; Moving Ahead for Progress in the 21 st Century Act Limits a new borrower’s eligibility for Direct Subsidized Loans No new subsidized loan for a student after they have exceeded 150% of the published length of their degree plan (Same as SAP Requirement) Proposal: Interest on the subsidized loan will start accruing once a student has reached 150% limit

Federal Direct Loans (Cont’d) Grace Period Interest Subsidy Eliminated Once a student has graduated or is no longer enrolled at least ½ time, interest will start accruing on the student loans (Previously, undergraduate and graduate students were given a six month grace period before interest started accruing on their subsidized loans.) Example: Loan Amount: $5,000 Interest accrued in six months at 6.8%: $170

Federal Direct Loans (Cont’d) Federal Direct Loan vs. Alternative Loan??? Loan Forgiveness for Qualified Borrowers Teaching and Other Public Service Loan Forgiveness Income Based Repayment Plan Deferment and Forbearance Loan Discharge Due to Death or Permanent Disability Fixed Interest Rate Tax Deductions for Loan Interest to Qualifying Borrowers

Federal Direct Loans (Cont’d) (DOE Five Star Training)

Federal Direct Loans (Cont’d) Default Loan Prevention An institution's cohort default rate is calculated as the percentage of borrowers in the cohort who default before the end of the second fiscal year following the fiscal year in which the borrowers entered repayment. This extends the length of time in which a student can default from two to three years. Universities are being forced to participate more fully in the education, notification and collection of information to prevent defaults.

State of Texas Financial Aid Changes Priority Deadline March 15 Tuition and Fee Waivers & Exemptions (i.e. Hazlewood Legacy & Foster) SAP Requirements Restricts Waiver to Undergraduate Students Restricts Waiver to 8 Semesters TEXAS Grant 75% Completion Rate of Attempted Hours in Previous Year

Conclusion Increased Emphasis on Timely Graduation SAP, Pell, Direct Loans Reduction in Federal Aid Programs TEACH Additional Cost to Students Loan Rebate, No Delay in Interest Accrual Increased Emphasis on Default Loan Prevention Income Based Repayment Plans, Loan Forgiveness