2012-2013 Federal Updates
Congress passed new regulations that affect Federal Direct Stafford loans, Federal Pell Grants and Verification for the 2012-2013 award year. A summary of changes are as follows:
Pell Grant eligibility
The duration of Federal Pell Grant eligibility has been reduced from the equivalent of 12 full-time semesters / 18 full-time quarters (i.e., 6 years). The Maximum amount of the Federal Pell Grant will remain the same for the 2012-2013 school year, however, the estimated family contribution (EFC) in which to receive a Federal Pell Grant has changed from a maximum EFC of 5,273 to a lower EFC of 4,996.
Qualifying Income for automatic zero ($0) EFC reduced
The automatic zero EFC is a status where, because of low income, a student automatically has a zero EFC. The automatic zero EFC income threshold is reduced to $23,000 from $32,000.
Satisfactory Academic Progress (SAP) Appeal Changes
Beginning January 2012, students at CSUB who desire to appeal their denial of financial aid due to not meeting SAP requirements may be required to meet with a SAP Advisor in the Academic Advising & Resource Center to complete and submit an academic plan. This academic plan will include gpa, pace, and/or coursework requirements that must be completed, and will be a contractual agreement to meet the entailed progress requirements.
Retaking Coursework
New federal regulations limit eligibility for Title IV federal aid due to repeated courses. Students may only receive Title IV federal aid for the first retake of a previously passed course. In addition, any subsequent retakes (after the first retake) of a previously passed course will not count towards the student’s actual enrollment for Title IV funding purposes.
Verification changes
Students selected for Verification for 2012-2013 who have not used the IRS Data Retrieval when completing their FAFSA will be required to submit an official Tax Return Transcript from the IRS to our office. The Financial Aid Office can no longer accept copies of the Federal Tax Return (1040, 1040A, 1040EZ, Etc.)
Tax transcripts can be obtained from the IRS website, or by calling 1 (800) 829-1040. Processing typically takes about 10 business days.
Loss of Subsidized Loan Eligibility for Graduate and Professional Students Enrolled in a Masters or Doctorate Program
Effective for loans made for periods of enrollment beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Federal Direct Subsidized Loans. The annual loan limit for graduate and professional students remains unchanged at $20,500, but this amount will now be limited to Direct Unsubsidized Loans.
Elimination of Direct Loan Borrower Repayment Incentives
The Department of Education will no longer offer repayment incentives to Direct Loan borrowers, effective for loans disbursed on or after July 1, 2012, including:
- any reduction in the interest rate or origination fee;
- Interest subsidy during the six-month grace period is eliminated for new Stafford Loans made on or after July 1, 2012. The repayment period still begins 6 months after the student is no longer enrolled at least half-time, but interest that accrues during those six months will be payable by the student rather than be subsidized by the federal government;
- The law continues to allow the Department of Education to offer interest rate reductions to Direct Loan borrowers who agree to have payments automatically debited from a bank account.
Increased Interest Rate for Federal Direct Subsidized Loans
The interest rate for Federal Direct Subsidized Loans will change from 3.4 percent to 6.8 percent beginning July 1, 2012. Unsubsidized Stafford loans will remain at a fixed 6.8 percent rate.
Note: the above changes are not all inclusive, and are meant to provide a brief summary of current Federal Department of Education Regulations. Contact the Financial Aid Office regarding specific questions or concerns.
2012-2013 State Updates
The California Student Aid Commission (CSAC) implemented new regulations affecting state aid programs, including:
Cal Grant
Beginning in the 2011-12 academic year, renewal recipients must meet the income and asset ceilings of the current academic year, or the year in which they were initially awarded Cal Grant eligibility, whichever is greater.
Cal Grant Proposed Changes
On January 5, 2012, Governor Jerry Brown released his 2012-13 Proposed State Budget. It includes proposals to change certain Cal Grant Program requirements and award amounts for both new and renewal students. These changes include:
Grade Point Averages (GPA) for Cal Grant participation are proposed to be raised as follows:
- Cal Grant A GPA from 3.00 to 3.25
- Cal Grant B GPA from 2.00 to 2.75
- Transfer Entitlement A & B from 2.40 to 2.75
Cal Grant Award amounts for proprietary and independent colleges are proposed to be reduced as follows:
- From $9,708 to $ 4,000 at proprietary colleges and universities
- From $9,708 to $ 5,472 at independent colleges and universities
California DREAM Act
The California Dream Act of 2011 became law through the passage of two state bills. AB 130 relating to private scholarships and AB 131 relating to financial aid administered by the State of California. Please refer to our Applying For Aid menu for more information.