Department Updates Guidance on Sequestration Impact

By Mandy Sponholtz, USA Funds Senior Policy Specialist

In the April 2 issue of USA Funds® Higher Education Success News, I provided a summary of changes to Title IV aid programs that are a result of sequestration. Late last week the U.S. Department of Education provided additional information on sequestration changes — and that new information clarifies how schools must originate Stafford and PLUS loans with fee amounts affected by sequestration.

Here’s the new guidance: According to its April 5 Electronic Announcement, the Department considers loans first disbursed on or after July 1, 2013, to be subject to the increased loan fees that are a result of mandatory budget cuts related to sequestration. This direction represents a change from original guidance, which had stated that higher fees would apply to loans with first disbursements after March 1, 2013.

With that updated guidance in mind, USA Funds Ask PolicySM has updated our table that summarizes those sequestration-related changes to Title IV aid programs

What questions do you have about guidance related to sequestration-related changes to Title IV aid? 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.