USA Funds Summarizes Sequestration Changes


By Mandy Sponholtz, Senior Policy Specialist


In Electronic Announcements issued March 1, 2013, and March 15, 2013, the U.S. Department of Education outlined changes to Title IV aid programs due to mandatory budget cuts resulting from sequestration.

Here’s a summary from USA Funds Ask PolicySM that breaks down those changes:



*In its March 15, 2013, Electronic Announcement, the Department stated that schools should continue to award and disburse loans using the 1 and 4 percent fees until the Department notifies them that systems can accommodate the increased amounts. The Department also states that schools are not responsible for the differences in the loan fee amounts, and that additional guidance on this issue is forthcoming. The Department may choose to collect the difference in the fee amounts from borrowers; schools will not be required to collect those amounts.

**If the first disbursement of funds was made on or before March 1, 2013, these reductions do not affect the subsequent disbursements of grant funds.

Do you have questions about sequestration’s effect on Title IV Aid programs? Send your questions to us in USA Funds Ask Policy by using our online form. We’ll get back to you, generally within one business day.​