Federal Title IV Loan Fund Management

Overview

Eligibility for Title IV loans is based on U.S. Department of Educcation (ED) regulations by Award Year and the institution's guidelines as applicable. Once eligibility is determined, the application calculates the award amount to be disbursed. Here are the Federal loans for which student applicants are considered:

Direct Stafford Subsidized Loan
Direct Stafford Unsubsidized Loan
Direct Parent PLUS Loan
Direct Graduate PLUS Loan

Federal Title IV Grants, Non-Federal Funds and Student Resources available through the institution can also be configured and managed.

Title IV Loans: What the Application Automatically Does

The application automatically does the following things for Title IV Loans.

Determines Stafford loan eligibility

If the student passes general Title IV eligibility requirements for a Stafford loan, the student is packaged with the appropriate funding. Direct Stafford loan eligibility requirements are evaluated per award year and the application determines if the student has exceeded the annual and/or aggregate loan limits or if the student had a prior loan discharged due to disability or total and permanent disability.

The application evaluates the student's program type (for example, graduate or undergraduate) and determines which type of Stafford loan the student is eligible to receive.

When the application receives loan period information, the application determines if the loan period is for the past, present or future.

For undergraduate students, the dependency status from the student’s ISIR is considered to determine if the student is eligible for the Dependent or Independent unsubsidized loan limit.

Determines Subsidized and Unsubsidized Direct Loan limits

Student Title IV loan awards are packaged using maximum limits determined by the U.S. Department of Education by grade level and dependency status. Grade levels are determined by calculating the total number of credits that can be applied toward program completion and the institution's academic year definition. Calculating the number of credits to use toward program completion includes summing the total number of credits completed and accepted transfer credits. Unacceptable transfer credits, credits earned from taking courses that aren't applicable to the program, and or credits earned before the start of the current program that don't count toward program completion aren’t used when determining the student's current grade level. Once the current grade level is determined, future grade levels for the remainder of the student's program are projected.

For undergraduate students, the dependency status from the student’s ISIR is considered to determine if the student is eligible for the Dependent or Independent unsubsidized loan limit.

Determines Additional Unsubsidized Direct Loan Limits

Additional Unsubsidized Direct Loan awards are calculated by determining the grade level limit up to the independent grade level limit considering any loans that overlap the current loan period using NSLDS data.

Dependent students who have a PLUS Loan Denial Indicator of True on the ISIR are automatically considered for Additional Unsubsidized Direct Loan funds. Also, a dependent student might have their Unsubsidized Direct Loan amount manually increased to where it's over the grade level limit for combined subsidized and unsubsidized Direct Loans.

If a student is awarded Additional Unsubsidized Direct Loans due to a PLUS denial, the Additional Unsubsidized Eligibility Indicator is automatically set to True when reporting the loan to COD.
If you manually award Additional Unsubsidized loans, you can set or unset the <Additional Unsubsidized Eligibility Indicator> by following the Edit Fund instructions at Add, Edit, or Remove a TIV Fund.

In either case, the Additional Unsubsidized Eligibility Indicator is set to True when reporting the loan to COD.

Students in selected medical programs can also be awarded Additional Unsubsidized Direct Loan funds. The amount is determined using the student’s academic program and fund configuration.

Fund Configuration for Additional Unsubsidized Direct Loans for student in selected medical programs isn'tpart of the Baseline Configuration. Take these steps in the FAS Fund Config workbook (FAS_FUND_CONFIG.csv) to configure an Unsubsidized Direct Loans fund for selected medical programs:

Enter DUNSUB in the Fund_Code column.
Reference a Groovy Script in the Medical_Eligible_Program_Amount_Info column. In this script, you can determine which programs are eligible for the Additional Unsubsidized Direct Loan amounts and how much a student should receive. When students are awarded Direct Loans using this script, the Fund Description display includes "Medical".

For any student packaged with Additional Unsubsidized Direct Loan funds in a selected medical program, the HPPA Indicator is set to True when reporting the loan to COD.

Determines if loan limit needs to be prorated

The application prorates the student's loan limit if the student is in an undergraduate certificate program and the program length is less than a standard academic year. To prorate the loan limit, the application multiplies the student's loan limit (based on grade level) by the lesser of the following ratios:

Remaining Program Credits ÷ Academic Year Definition Credits
Remaining Program Weeks ÷ Academic Year Definition Weeks

If the student is in an undergraduate Bachelors program and the Borrower-Based Academic Year (BBAY) has a partial academic year, the application prorates the student's loan limit. To prorate the loan limit, the application multiplies the student's loan limit (based on grade level) by the following ratio:

Remaining Program Credits ÷ Academic Year Definition Credits

To identify the final academic year to be considered for proration, SFP uses the last academic year received in the Student Academic and Financial Information (SAFI) message. To ensure correct Direct Loan calculations, all academic years up to the end of the student's program must be sent in the SAFI Message.

Determines the current and projected subsidized loans awards

The application determines the maximum projected award amount, based on the annual and aggregate award year loan limits established by the U.S. Department of Education for the current loan period and all future loan periods in the student's program so the student can review how much can be received for the entire program.

When determining the student's maximum projected Stafford loan award(s) for a loan period, the application considers the student's:

Financial Need.
Subsidized loan limit.
Unsubsidized loan limit.
Grade level loan limit.
Prorated loan limit.
Remaining overlapping loan limit.
Remaining loan eligibility based on NSLDS annual limits and overlapping loans.
Remaining loan eligibility based on NSLDS aggregate limits, if applicable.

Determines the Award Year Used for Direct Loan Awards for a Crossover Payment Period

You can use the Direct_Loan_Crossover_LP_AwY_Selection (Direct Loan Crossover Loan Period Award Year Selection) field in the Package Schedule Attributes Guide to select which Aid Year to use for Direct Loan awards for the crossover payment period. If you don't configure the Direct_Loan_Crossover_LP_AwY_Selection, the application defaults to the predefined aid year selection rules per Fund Code.

When no ISIR is received for the Loan Period Award Year, and:

An ISIR is received for the prior aid year only, the application packages the Direct Loan fund as projected.
An ISIR received is for the future year only, the student is ineligible for Direct Loans.

Updates the Stafford Loan fund status

The application updates the fund status during the packaging process from Estimated or Projected to Awarded once the fund meets the configured awarding criteria. Once the status has updated to Awarded it doesn't revert back to an Estimated or Projected unless the ISIR is updated from Valid to Invalid. If the ISIR status is updated to Invalid, the fund status would be updated from Awarded to Projected. If a student is awarded and then the eligible fund amount is adjusted, the fund status remains Awarded; however, the award amount is adjusted and the fund requires acceptance as necessary.

The Financial Plan Outbound (FPO) message is generated based on the student's packaging status updates. This is used to inform the student if the packaging status is Projected, Estimated, or Awarded.

Parent PLUS and Grad PLUS

The following sections discuss what the application does automatically for Parent PLUS and Grade PLUS loans.

Determines Stafford PLUS loan eligibility

Undergraduate and Graduate students are eligible for a PLUS Loan, per award year. Direct Stafford PLUS Loan eligibility requirements are evaluated per award year and the application determines if the student had a prior loan discharged due to disability or total and permanent disability and if so, Comment Code 137 has been cleared. The application checks if the student/borrower is a citizen of the Marshall Islands, Micronesia or Palau, and requires the student/borrower's Alien Registration Number if they are. If the student passes general Title IV eligibility requirements for a Stafford PLUS loan, the student is packaged with the appropriate funding.

Once the PLUS Loan Application is received, the application takes the Credit Decision results into consideration while determining the student's eligibility.

Determines if there is prior PLUS application for the borrower in the Academic Year

The application can award multiple PLUS or Graduate PLUS loans within an academic year, including loans received by more than a single borrower. This is done by taking these steps in the FAS Fund Config workbook (FAS_FUND_CONFIG.csv):

Enter PLUS or GPLUS in the Fund_Code field.
Reference a Groovy Script in the PLUS_Credit_Decision_Matching_Criteria field. In this script, you can determine the terms within a student's program that a PLUS application are matched to. When students are awarded Direct PLUS Loans using this script, the Fund Description display includes the Borrower Name and Application ID.

Evaluates the credit decision

If the student is eligible for a PLUS loan based on the final Credit Decision status for the academic year being evaluated, the application determines if the loan period is for the past, present or future.

If the borrower has an accepted/approved Credit Decision that's processed during the current Academic Year and it hasn't expired, the borrower is eligible for a PLUS Loan. The application doesn't award a borrower a PLUS Loan if their Credit Decision is denied. If the borrower is denied, the PLUS Loan Denial Indicator is updated so the student can receive additional Unsubsidized funding. If a new PLUS Loan Application with an updated Credit Decision is received, the application updates the PLUS Loan Denial Indicator.

Form Name Updated

The credit decision form name has been updated from Credit Decision Override to Credit Status Response. Both form names are still visible in the application UI, depending on the Award Year the form was received.

Award Years 2014-2015 and before: Credit Decision Override.
Award Years 2015-2016 and beyond: Credit Status Response.

If a Credit Status Response message is received, the application considers the Credit Decision result while determining the student's eligibility.

If the borrower has multiple Credit Decisions, the application first determines if the borrower has an accepted/approved Credit Decision and then uses the latest Credit Decision to determine Stafford PLUS Loan eligibility. If the Credit Decision is denied, but the borrower has an Endorser, the application obtains the Endorser Amount and considers the Endorsed Amount during awarding.

When a PLUS Application/Credit Status Response file is received and associated with a student, the application evaluates the credit decision status and calculates the Application Loan Amount associated with the credit decision status. When a Credit Status Response is received for a student, the application considers the override code received within the file.

When a PLUS Application or Credit Status Response file is received for a student, the application determines if the credit decision is for a Parent PLUS or Grad PLUS Loan, the associated academic year(s), the credit decision status and if applicable, associates an endorser amount to the credit decision status.

Determines the current and maximum projected PLUS award amount

The application determines the Maximum Projected Award amount for the current loan period and all future loan periods in the student's program.

The application also determines the Maximum Projected PLUS Award for an academic year in which all eligibility requirements have been satisfied and awards up to the amount unpackaged. The student's Maximum Projected PLUS award is limited by either the Unpackaged Amount, the Endorser Amount (if applicable), and/or Application Loan Amount (if applicable).

Sets the final credit decision status

The final credit decision status is confirmed or updated when a PLUS Application/Credit Status Response file is received and associated with an academic year and the final status is used to determine the student's eligibility for a PLUS award. The application packages a separate PLUS loan for all approved credit decisions received that have been matched to an academic year or term within the student’s program.

Once the Final Credit Decision status is determined for an academic year, the application sets the Plus Denial Indicator based on the credit decision status.

Updates the PLUS fund status

The application updates the fund status during the packaging process from Estimated or Projected to Awarded once the fund meets the configured awarding criteria. Once the status has updated to Awarded it doesn't revert back to an Estimated or Projected unless the ISIR is updated from Valid to Invalid. If the ISIR status is updated to Invalid, the fund status would be updated from Awarded to Projected. If a student is awarded and then their eligible fund amount is adjusted, the fund status remains Awarded; however, the award amount is adjusted and the fund requires acceptance as necessary. If an award amount increases and the student doesn't pass the award criteria check, the application doesn't award the additional amount.

Configurable Attributes

Configure Fund Attributes

The institution can configure certain attributes in order for funds to be awarded properly.

Configure Student Resource Funds

The application can account for funding that has been provided to the student outside of the application through the student resource tag within the SAFI Message. to ensure that the application understands how to handle the received fund amount, the fund must be configured in the Fund Configuration Engine. Configuration for the fund within the Fund Configuration Engine allows the application to understand what Borrower Based academic year (BBAY) to place the fund in, if the fund goes toward funding up to the COA, and other such items that help the application on the packaging and advisory side.

It should be noted that any received fund amounts through the student resource tag should not be adjusted by the application in the student's package, even if the fund is lower in priority than a Title IV fund. (for example, if the application is packaging a student up to COA and they've hit COA without accounting for the student resource fund, the Packaging Engine reduces the funds that are higher in priority within the Fund Configuration Engine to account for all the student resource funds).

If the fund is unknown to the application because it's not configured via the Fund Configuration Engine, the application doesn't process the fund and the fund goes through the application exception handling process.

Required Role Permissions

The user must have a role with this General Permission through Roles Management to view the following information:

Student

See Set General Permissions Matrix for more information.

Navigation to the Application UI Functionality

To view the packaged funds:

the application User Interface > Student > > Financial Information > Packaging > Student > Financial Information > Packaging