Fourth year sequester changes for fiscal year (FY) 2016 for the TEACH Grant, Iraq-Afghanistan Service Grant (IASG), and Direct Loan origination fees have been announced by the Department of Education (ED) in Dear Colleague GEN-15-07.
Fiscal year 2016 will begin on October 1, 2015 and changes announced in the DCL will take effect 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, 2015 and before October 1, 2016 will require a reduction of 6.8 percent from the original amount. The IASG will require a reduction of 6.8 percent from the original amount where the award is first disbursed on or after October 1, 2015 and before October 1, 2016.
Direct loan origination fees will also change as follows:
The DCL includes a helpful chart showing the decreases and effective dates for 2015-16 as compared to 2014-15. The chart also illustrates various loan origination fees. The loan origination fees are set to decrease slightly compared to last year because the sequestration amount is applied to the loan fee in statute (1.00 percent for Direct Subsidized Loans and 4.00 for PLUS), rather than a cumulative increase.
Publication Date: 4/24/2015