Third year sequester reductions for mandatory funded Federal Student Aid programs have been announced by the Department of Education (ED) in Dear Colleague Letter (DCL) GEN-14-10 posted to IFAP on May 2. The letter spells out fiscal year (FY) 2015 reductions for the TEACH Grant and Iran-Afghanistan Service Grant (IASG) programs and increases to Direct Loan origination fees.
Fiscal year 2015 will begin on October 1, 2014 and changes announced in the DCL will take affect on awards for which the first disbursement is made on or after that date.
A TEACH Grant where the first disbursement is on or after October 1, 2014 and before October 1, 2015 will require a reduction of 7.3 percent from the original amount. The IASG will require a reduction of 7.3 percent from the original amount where the award is first disbursed on or after October 1 and before October 1, 2015.
Direct loan origination fees will also increase as follows:
The DCL includes a helpful chart showing the decreases and effective dates for 2014-15 as compared to 2013-14. The chart also illustrates various loan origination fees.
Publication Date: 5/5/2014