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News and Announcements
Below are news and announcements you may find helpful in your financial aid process.
New Origination Fees for Direct Loans
November 15, 2013
The U.S. Department of Education has scheduled a second round of fee hikes for Federal Direct Loans including the PLUS Loan program due to the federal budget sequestration.
|Federal Student Loan Origination Fees
||After Initial Increase Under Sequester
||After Second Increase Under Sequester
|Fees in Effect for:
||Loans first disbursed before July 1, 2013
||Loans first disbursed from July 1, 2013 through November 30, 2013
||Loans first disbursed on or after December 1, 2013 through September 30, 2014
|Origination Fee %
|Federal Direct Loans
|Federal PLUS Loans
|Federal Graduate PLUS Loans
NOTE: The sequester-induced fee hikes are in effect until Congress enacts new legislation or the U.S. Department of Education announces a new rate schedule.
New Interest Rates for Direct Loans
August 9, 2013
President Obama on Friday signed into law a new way of setting interest rates for federal education loans. The rates will now move with the financial markets, which mean lower rates for the coming school year. For 2013-14, the interest rate for undergraduates is 3.86 percent, and for graduate students it is 5.41 percent. The rate for Direct PLUS Loans, which are taken out by parents of students and graduate students, is 6.41 percent. Included, Congress has imposed caps on how high these rates can go in future years: 8.25 percent for undergraduates, 9.5 percent for graduate students and 10.5 percent for Direct PLUS Loans.
Senate passes Interest Rates based on T-bill
July 25, 2013
The Senate, Wednesday, July 24, 2013, approved legislation to link interest rates on student loans to the market, and it looks like it will have the support from both the House and the White House. Under the legislation, student loan rates would reset each July based on the previous May's auction of 10-year Treasury bills.
Undergraduate loans (both subsidized and unsubsidized) would be set at the Treasury rate plus 2.05 percentage points, while graduate loans would be set at 3.6 points above the Treasury rate, and loans for parents at 4.6 percentage points over the Treasury rate. The maximum rate would be capped at 8.25 percent for undergraduate loans, 9.5 percent for graduate student loans, and 10.5 percent for parent loans.
Based on May's auction of the 10-year T-bill, loans for the 2014 fiscal year would be 3.86 percent for undergraduates, 5.41 percent for graduates and 6.41 percent for parents. Keep posted.
Student Loan Interest Rates Comes to a Vote
July 24, 2013
A bipartisan group of senators reached a tentative agreement to fix federal student loan rates. The plan being discussed that would use 10-year Treasury notes as a basis and then adds a certain number of points depending on the type of loan. The formulas for interest rates: 10-year Treasury note plus 2.05 percent for both the subsidized and unsubsidized portions of the undergraduate loans, plus 3.6 percent for graduate loans and plus 4.6 percent for PLUS loans. Those rates would be capped at 8.5 percent, 9.5 percent and 10.5 percent, respectively. The bill is do to the Senate Floor to vote within the next day or so - we will keep you posted.
Federal Sequestration & 2013-14 Financial Aid programs
June 20, 2013
Under the terms of the Budget Control Act of 2011, the federal government imposed across-the-board budget cuts that became effective on March 1, 2013. These sequestration cuts affect higher education programs, including federal student aid. Here is a summary of sequestration cuts on federal student aid programs for 2013-14:
- Federal Pell Grant no changes
- FSEOG a reduction to the University’s 2013-14 federal allocation
- Federal Direct Loans (subsidized/unsubsidized) 1.051% increase to origination fee
- Federal Direct PLUS Loan 4.204% increase to origination fee
- Federal Work Study a reduction to the University’s 2013-14 federal allocation
- Federal Perkins Loan no changes
- TEACH Grant New awards disbursed after March 1 must be reduced by 6.0% from the award amount for which the student otherwise would have been eligible
More information about the impact of sequestration, we suggest that you visit the Federal Student Aid website.
Your 2013-14 Undergraduate Financial Aid Award
May 3, 2013
Our office uses the FAFSA (Free Application for Federal Student Aid) results to determine eligibility for the various financial aid programs. The total amount of financial aid that a student receives is referred to as the financial aid package. The financial aid package will reflect all federal, state and University aid including scholarships, grants, federal work-study and loans. Since the initial financial aid package is provided several months prior to the student's enrollment, it is determined based on the following assumptions:
- Student will be enrolled full-time
- Living status as reported by the student on the FAFSA
- Loan amounts are based on the grade level (number of completed credits) and will be processed for the maximum amount the student is eligible to receive
If you will not be enrolled full-time, change your housing status or want to reduce/cancel your loans, please contact our office.
Adjustments to the initial award package may be necessary if additional information is received that is different from the assumptions used to determine the original package. If you are receiving additional awards that are not included in your financial aid package you must notify our office.
Please note that any changes to the FAFSA data may result in an adjustment to your financial aid package, including but not limited to:
- Review of your FAFSA due to Verification
- Enrollment less than full-time
- Please note students must be enrolled at least six credits to receive a Federal Direct Loans and the Federal Direct PLUS Loan
- Change in your housing status from what was reported on the FAFSA
- Corrections made due to conflicting data
NOTE: You will receive an electronic notification each time your award package has been adjusted.
Graduating at the end of Spring?
April 25, 2013
Graduating students who have borrowed a Federal Direct Loan or a Federal Perkins Loan while attending the Santa Clara University are required to complete exit counseling on-line by visiting our Exit Counseling webpage.
Need Federal Loans for Summer School?
April 25, 2013
The deadline to request a William D. Ford Federal Direct Loan for the summer term is June 14, 2013. Please contact the Financial Aid Office to request a student loan. Please make sure you completed the 2012-13 Free Application for Federal Student Aid (FAFSA) to determine your loan eligibility.
Change to Aid due to Sequester
March 18, 2013
On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as a “sequester,” to take effect if Congress failed to enact legislation to reduce the federal deficit by March 1, 2013. Because Congress did not act, these budget cuts are now in effect.
Federal Direct Loans
While this law does not otherwise change the amount, terms or conditions of Federal Direct Loans, it does raise the loan fee paid by borrowers for Federal Direct Loans disbursed after March 1, 2013.
- For both the subsidized and unsubsidized Federal Direct Loans, the loan fee will increase from 1.0 percent of the principal amount of a loan to 1.05 percent.
- For Direct Federal PLUS Loan and the Direct Federal Graduate PLUS Loan, the loan fee will increase from 4.0 percent to 4.204 percent.
Iraq-Afghanistan Service Grant
Award amounts for any Iraq-Afghanistan Service Grant that is first disbursed after March 1, 2013 must be reduced by 37.8 percent from the award amount for which a recipient would otherwise have been entitled.
Award amounts for any TEACH Grant that is first disbursed after March 1, 2013 must be reduced by 12.6 percent from the award amount for which a recipient would otherwise have been eligible.
Santa Clara University and other colleges will also see a reduction to both Federal Work Study and Federal Supplemental Educational Opportunity Grant funding for 2013-14.
Graduating at the end of Winter?
February 27, 2013
All federal student loan borrowers are required to complete an exit counseling tutorial upon graduation. The exit counseling tutorial will review your rights, responsibilities and repayment terms. To complete this federal requirement, simply log onto https://studentloans.gov and click on "Exit Counseling" under the "Tools and Resources" section.
NOTE: You will need your Federal Student Aid PIN to complete the federal requirement.
Your financial future begins now! Good loan repayment habits will build good credit. Numerous options exist, including deferred repayment and income contingent repayment. Your loan servicer will work with you to select the option that is best for you.
Common Mistakes when Completing the FAFSA
February 4, 2013
The best way to complete the FAFSA (Free Application for Federal Student Aid) is early, and online. As you complete the FAFSA try to avoid these common errors.
- Completing the wrong FAFSA aid year
- Leaving blank fields
- Using commas or decimal points in numeric fields
- Entering incorrect Social Security Number (SSN)
- Entering incorrect Driver's license number
- Indicating your gender
- Entering the wrong federal income tax paid amount
- Entering Adjusted Gross Income (AGI) as equal to total income
- Listing parent marital status incorrectly
- Forgetting to sign and date
Reporting Assets on the FAFSA
January 24, 2013
Some students and parents are unsure on what assets that should be included and what is not required on the FAFSA (Free Application for Federal Student Aid).
|Include these Assets||Do Not Include these Assets|
|Savings||Value of your family home or farm|
|Stocks & Bonds||Value of annuities|
|Mutual Funds||Life Insurance plans|
|Money Market Accounts||Non-Education IRAs|
|Real Estate Investments||401(k) plans|
|Trusts||KEOGH or other retirement plans|
|Education Savings Accounts*|
NOTE: The value of all 529 college savings plans, prepaid tuition plans and Coverdell education savings accounts owned by a parent or by the parent’s dependent children must be reported as a parent asset on the FAFSA, regardless of who is listed as a beneficiary on the account. UGMA and UTMA accounts are considered assets of the student, and must be reported as an asset of the student on the FAFSA, regardless of the student's dependency status.
NOTE: You must report contributions to any tax-deferred pension or savings plan.
Unique FAFSA Filing Situations
January 18, 2013
When completing the FAFSA (Free Application for Federal Student Aid), your students may find themselves in a situation that requires some additional direction:
Divorced or Separated Parents
The parent with whom the student lived with the most during the past twelve months should complete the FAFSA. If the student did not live with one parent more than the other, the parent who provided the most support in the past twelve months (or in the most recent year that parental support was received) should complete the FAFSA. Support includes food, shelter, clothing, insurance, etc., in addition to cash payments.
If parents who are separated file a joint tax return, only the parent with whom the student lived (as defined above) must report on the FAFSA their income, assets, taxes paid and household size. It does not matter if this parent is not the one who claimed the student on their tax return.
For financial aid purposes, a couple is considered separated only if there is physical separation. This means that a married couple who claims to be separated, but is still living together is considered married, and both parents must provide information on the FAFSA.
If a parent has remarried, both the parent and the stepparent must report information on the FAFSA. A prenuptial agreement does not exempt a stepparent from providing his or her information.
If the biological parent dies and the stepparent survives, the student becomes independent unless:
- The student is dependent on the surviving biological parent, or
- The stepparent legally adopted the student.
For financial aid purposes, adoptive parents are the same as biological parents.
For financial aid purposes, foster parents are not the same as biological parents. A student living with foster parents is a ward of the court and is considered an independent student.
The 2013-14 FAFSA is Available
January 2, 2013
The 2013–14 FAFSA (Free Application for Federal Student Aid) is available. We encourage students and their families to complete the FAFSA as soon as possible to meet the deadlines for student aid.
The FAFSA determines a student's eligibility for most federal and state grant awards, work-study programs, some University aid and federal student loans.
The FAFSA is available online at www.fafsa.ed.gov. Completing the FAFSA online helps eliminate errors and offers a quicker processing time.