Resources, Terminology & Examples

Resources

Federal Student Aid:
The Department of Education’s Office of Federal Student Aid is responsible for managing federal student financial assistance programs. Its website provides more information on federal grants and loans.

Closed Schools:
A current list of closed schools and resources for their students may be found here.

Federal Loan Servicers:

Log in to "My Federal Student Aid" or call 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf or hard of hearing 1-800-730-8913) to find out who your loan servicer is.

Form 1098-T for completing taxes:
All questions relating to Internal Revenue Service (IRS) forms and their requirements for filing their forms should be directed to the IRS. You may contact the IRS via telephone at 1-800-829-1040.

GI Bill benefits:
To learn more about restoring your GI Bill benefits after a school closure and to speak to a representative about your options, you may contact the Veteran Affairs’ Education Call Center at 1-888-442-4551. Additional information can also be found on the Department of Veterans Affairs (VA) GI Bill website.

National Student Loan Data System:

The National Student Loan Data System (NSLDS) is the U.S. Department of Education's central database for student aid. Log in to view your federal loans, grants, aid overpayments, and the status of your loans that are subject to subsidized usage limits.

Borrowers do not get to pick their federal loan servicer, as they are assigned by the Department of Education when their first loan is disbursed. To find your federal loan servicer you should log on to www.nslds.ed.gov, choose the Financial Aid Review tab and log in with your FSA ID.

Private Student Loan Servicers:

Private student loan information cannot be accessed via the National Student Loan Data System. If you can’t remember which lender you used when you applied for your private student loan, the best way to determine who your private student loan servicer is is to order a copy of your credit report from one of the three main companies: Experian, Equifax, and TransUnion. You can find more information about ordering your credit report on the Federal Trade Commission’s Free Credit Reports page.

Terminology

Financial aid is any loan, grant, scholarship, or paid employment used by a student to meet his or her education expenses. These funds can be supplied through federal, state, institutional, or private sources. The amount of funds a student can receive is based on guidelines set by each source. Below is a list of key financial aid terms and definitions.

• Federal financial aid vs. state and institutional financial aid
  • Federal financial aid programs are funded and supported by the federal government, such as the Direct Loan programs, and the Pell Grant program. State programs vary from state to state and are usually awarded based on information collected on the FAFSA application. Institutional aid is awarded through the school the student is attending. Institutional aid can be based on financial need, academic merit, or a combination of the two. The amount of aid an institution awards varies by institution, as they set their own limits based on available funding.

Student Aid Programs:

• Federal Subsidized Direct Loans (Sub)
  • Subsidized Loans are loans offered by the federal government, where the government pays the interest for the loan while the student is enrolled in school. Students must be able to demonstrate financial need to receive this type of loan. Borrowers start paying interest on these loans after they graduate. The amount a student can borrow is based on his or her year in school/the academic credits the student has earned.
• Federal Unsubsidized Direct Loans (Unsub)
  • Unsubsidized Loans are loans offered by the federal government and are not based on financial need. Interest starts accruing immediately on these loans and has to be paid back by the borrower.  The amount a student can borrow is based on his or her year in school/the academic credits the student has earned.
• Federal PLUS Loans (PLUS Loan)
  • A PLUS Loan is a federally-backed loan program that parents can use to help pay for their dependent student’s college education, or that graduate students can take out to help fund their education in addition to an Unsubsidized Direct Loan. Unlike Federal Direct Subsidized and Unsubsidized loans, this loan type requires a credit check initiated by the federal government.
• Direct Consolidation Loan
  • A Consolidation Loan combines two or more Federal Direct Loans into a single loan. This process allows the borrower to make one payment for all their loans instead of multiple payments. To qualify for certain repayment plans or forgiveness programs borrowers must first consolidate their federal loans.
• Federal Family Education Loan (FFEL)
  • The FFEL program was the second largest loan program that supplied students with higher education funding. Unlike the current Direct Loan program which is administered through the federal government, FFEL loans were administered by private lenders funded through partnerships at the state/local level. The FFEL program was ended in 2010 and borrowers are still required to repay those loans.
• Federal Perkins Loan (Perkins)
  • Federal Perkins loans are loans offered by the Department of Education to exceptionally needy students to help fund their education. The student’s institution acts as their lender for this program, and the student makes payments back to that institution after graduation.
• Alternative names for loan programs (Direct Loans, Sub Loans, Parent PLUS loans, Grad PLUS loans, etc.)
  • Other names you may encounter for loan programs are: DL, Sub, Unsub, PLUS, GPLUS, PPLUS, Federal Direct Subsidized Stafford, Federal Direct Unsubsidized Stafford, Perkins, Alt Loan

Award Amounts and Lifetime Eligibility Caps

Federal Direct Loans and the Federal Pell Grant both have annual and lifetime award caps. The amount of Federal Direct Loans a student can receive each year depends on the amount of credits the student has earned. For example, 0-29 credits have a $5,500 max, 30-59 credits have a $6,500 max, and 60+ credits have a $7,500 max for dependent students. Independent students can borrow an additional $4,000 during their first 0-59 credits, and an additional $5,000 for 60+ credits. Dependent students may borrow a maximum of $31,000 over their undergraduate career, and independent students may borrow up to $57,500.

Pell Grant amounts vary year to year and are set by the federal government. The amount a student may receive is based on their EFC (Expected Family Contribution – a formula used by the FAFSA to determine student financial need) and their enrollment status. In certain situations students may be able to receive 150 percent of the maximum Pell Grant award in an academic year. The amount of Pell Grant funds you may receive over your lifetime is limited by federal law to be the equivalent of six years of Pell Grant funding.

Attendence

Attendance in a course is the act of regularly participating in a class in a substantive way.

Cost of Attendence

This figure, which can vary from institution to institution, estimates the total costs a student can expect to have if they choose to attend their school. These costs can include tuition, fees, room and board, books, supplies, personal expenses, and transportation. The amount of financial aid a student can receive in one academic year depends on the cost of attendance that the institution has set.

Enrollment

Enrollment is the number of credit hours a student is enrolled in, or attending, each semester, quarter, term, etc. A student's enrollments status can affect their aid eligibility, loan deferments, or any other official certification. Generally enrollment is defined as less than or below half-time (0-5 credits), half-time (6-8 credits), three-quarter time (9-11 credits), and full-time (12+ credits).

Academic Year

An academic year generally includes a Fall, Spring, and Summer semester or term. For many financial aid programs with annual caps, these three terms would make up the student’s eligible period of usage.

How to find your private loans

Finding out who your private loan servicer is, if you don’t remember who you applied through, can be a little more tricky as it can’t be accessed on NSLDS. The best way to find your private student loan servicer is to pull up your credit report and look for the loan servicer that way.

Ineligibility

Below are the factors that could make you ineligible for a closed school federal loan discharge, Pell Grant restoration, or fraud/universal borrower defense.

• You may be ineligible for a closed school discharge if:
  • Your school closed, but you graduated and received a degree
  • You withdrew more than 120 days before the school closed
  • You transferred credits into same or comparable credits at another institution
  • You completed your program (approved by accreditor) through a teach-out set up by your institution
  • You completed all the coursework for the program, even if you did not receive a degree
• You may be ineligible to receive Pell Grant restoration if:
  • You don’t have an approved borrower defense application
• You may be ineligible to receive an approved borrower defense claim if:
  • You did not complete and submit a borrower defense application You only borrowed non-federal loans

Examples of possible scenarios

• Example 1 – If you were a student whose college or career school closed while you were enrolled, or within 120 days after you withdrew.
• Sara received a Federal Perkins Loan to attend a small school in Chicago, pursuing a nursing program. Sara was enrolled in her program when the school closed. Sara is eligible to receive a closed school federal loan discharge for her Federal Perkins Loan. Sara also had a private loan to attend the same school, but because the closed school federal loan discharge only applies to federal loans and not private, Sara will contact her lender and/or the state licensing agency to retrieve additional information on her private loan.
• Example 2 – If you were a student attending ITT Technical Institute when it announced its closure on Sept. 6, 2016, or withdrew from an ITT Technical Institute location on or after May 6, 2016.
• David received a Graduate PLUS Loan to pursue a Master of Business Administration program at ITT Technical Institute. David graduated from ITT Technical Institute in May 2006. Since David graduated 10 years prior to ITT Technical Institute announcing its closure on Sept. 6, 2016, David would not qualify to have his Graduate PLUS Loan discharged.
• Example 3 – If you were a student attending any Corinthian Colleges school (Everest, WyoTech, or Heald) when it closed on April 27, 2015, or withdrew from one of these schools after June 20, 2014.
• Mark received a Federal Direct Subsidized Loan to pursue a medical assistant program at Corinthian Colleges. Mark withdrew from the program on July 18, 2014. Because Mark withdrew AFTER the eligibility requirement of June 20, 2014 (the Department of Education extended the 120 day deadline for these particular institutions), Mark is eligible to receive a closed school federal loan discharge for his Federal Direct Subsidized Loan.  
• Example 4 – If you transferred your earned credits to another institution to continue your education in a comparable or similar program.
• Grace received a Federal Perkins Loan and was attending Corinthian Colleges in pursuit of a massage therapy program when it closed on April 27, 2015. Instead of applying for a closed school federal loan discharge, Grace decided to keep her credits and transfer them to another institution that has a comparable program. Grace contacted the institution that she was interested in, which evaluated her credits and decided to accept her previous coursework. Grace is now attending the new institution. Since Grace is now in the process of completing her program at the new institution, she is no longer eligible to apply for a closed school federal loan discharge.
• Example 5 – If you transferred your earned credits to another institution to continue your education in a completely different program of study.
• Grace received a Federal Perkins Loan and was attending Corinthian Colleges in pursuit of a massage therapy program when it closed on April 27, 2015. Grace decided to enroll in a completely different program of study – cybersecurity – at another institution. Grace may be eligible for a closed school federal loan discharge because the program of study at the new school is completely different from the program of study at the closed school for which her Federal Perkins Loan was intended.