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Sequester Info 2014

On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as a “sequester,” to take effect if Congress failed to enact legislation to reduce the federal deficit by March 1, 2013. Because Congress did not act, across-the-board budget cuts on the Federal Student Financial Aid programs have been in effect since Spring 2013. Additional sequester funding reductions took effect with the start of the 2014 Federal fiscal year (FY 2014). The sequester changes the amount of TEACH Grant awards for FY 2014 and requires further increases to origination fees on Federal Direct Loans. Each Federal Student Financial Aid program and the sequester requirements are discussed below.

Federal Pell Grant Program - No impact for 2013-2014 award year

The Federal Pell Grant Program is exempted from the sequester funding cuts, thus the 2013-2014 award year payment schedules remain in effect without any changes. The maximum Pell Grant award for the 2013-2014 Award Year remains at $5,645.
Information about 2014-2015 award year Pell Grant payment amounts will not be available until a bill is enacted that provides an appropriation for the program.

Campus-Based Programs - No further impact for the 2013-2014 award year

The 2013-2014 award year campus-based allocations remain valid as those amounts were determined under the earlier sequestration requirements. At this time, no information is available on how the sequester will impact the 2014-2015 award year campus-based allocations.

TEACH Grants - Updated Award Amounts

Beginning on October 1, 2013, the sequester changes the percentage by which TEACH Grant awards must be reduced as compared to the sequester percentage reduction that became effective Spring 2013. Specifically, TEACH Grant awards where the first disbursement is made on or after October 1, 2013, must be reduced by 7.2 percent from the original statutory amounts ($4000 annually). TEACH Grant awards where the first disbursement was made after March 1, 2013 and prior to October 1, 2013 continue to be covered under the FY 2013 sequester and must be reduced by 6.0 percent from the original statutory award amount regardless of when any subsequent disbursement of the award is made. 

 

 

TEACH Grant Undergraduate Awards

Enrollment Status

Annual Award Amounts First Disbursed on or after October 1, 2014 and before October 1, 2015 (FY 2015 Sequester)

Annual Award Amounts First Disbursed on or after October 1, 2015 and before October 1, 2016 (FY 2016 Sequester)

Full Time Enrollment (12+ units)

$3,708

$3,728

Part Time Enrollment (9-11 units)

$2,781

$2,796

Half Time Enrollment (6-8 units)

$1,854

$1,864

Less than Half Time Enrollment (5 or less units)

$927

$932

TEACH Grant Graduate Awards

Full Time Enrollment (9+ units)

$3,708

$3,728

Half Time Enrollment (5-8 units)

$1,854

$1,864

Less than Half Time Enrollment (4 or less units)

$927

$932

Direct Loans - Increased Loan Fees

As of October 1, 2013, the sequester increases the origination fees charged to Direct Loan borrowers beyond last year's increases.  However, the new loan fee percentages will apply only with regard to loans where the first disbursement is made on or after December 1, 2013.  The new loan fees are 1.072 percent for Direct Subsidized Loans and Direct Unsubsidized Loans and 4.288 percent for Direct PLUS Loans (both parent and graduate student PLUS Loans).

Direct Loan Origination Fees

Loan Type First Disbursed on or after July 1, 2013 and before November 30, 2013 First Disbursed on or after December 1, 2013 and before September 30, 2014 (FY 2014 Sequester)

Direct Subsidized Loans

and

Direct Unsubsidized Loans

1.051% Orig. Fee = $57.80 on a $5,500 loan 1.072% Orig. Fee = $58.96 on a $5,500 loan

Federal Direct Parent PLUS

and 

Federal Direct Grad PLUS

4.204% Orig Fee = $420.40 on a $10,000 loan 4.288% Orig. Fee = $428.80 on a $10,000 loan

 

  • Office of Scholarships and Financial Aid, P.O. Box 210066, Tucson, AZ 85721
  • Phone: 520.621.1858
  • Fax: 520.621.9473