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AwardYear: 1997-1998 EnterChapterNo: 11 EnterChapterTitle: William D. Ford Federal Direct Loan Program SectionNumber: SectionTitle: Contents PageNumbers: 0 INTRODUCTION . . . . . 1 SECTION 1: ELIGIBILITY . . . . . 3 Student Borrower Eligibility . . . . . 3 Parent Borrower Eligibility . . . . . 6 Eligibility After Bankruptcy Discharge . . . . . 7 Refusal to Originate a Loan . . . . . 7 Institutional Eligibility . . . . . 8 Withdrawing from the Direct Loan Program . . . . . 10 SECTION 2: DIRECT SUBSIDIZED LOANS, DIRECT UNSUBSIDIZED LOANS, AND DIRECT PLUS LOANS . . . . 11 Credit History . . . . . 11 Loan Limits . . . . . 12 Prorated Annual Loan Limits--Direct Subsidized and Unsubsidized Loans . . . . . 17 Interest Rates . . . . . 20 Additional Borrowing Costs . . . . . 23 Grace Periods--Direct Subsidized and Unsubsidized Loans . . . . . 23 Repayment . . . . . 24 Deferment . . . . . 29 Forbearance . . . . . 33 Discharge . . . . . 35 Department of Defense Repayment . . . . . 37 Borrower Defenses . . . . . 37 SECTION 3: DIRECT CONSOLIDATION LOANS . . . . . 39 Types of Direct Consolidation Loans . . . . . 39 Loan Limits . . . . . 41 Interest Rates . . . . . 41 Additional Borrowing Costs . . . . . 42 Eligibility . . . . . 42 Regular Consolidation . . . . . 43 In-School Consolidation . . . . . 45 PLUS Loan Consolidation . . . . . 47 Consolidating Defaulted Loans . . . . . 47 Subsequent Consolidation . . . . . 48 Repayment . . . . . 49 Holder Responsibilities . . . . . 50 SECTION 4: DEFAULT . . . . . 53 Default's Effect on Borrowers . . . . . 53 Default's Effect on Schools . . . . . 56 Public, Private Nonprofit, or Proprietary Degree-Granting Schools . . . . . 56 Proprietary Non-Degree-Granting Schools . . . . . 58 Weighted Average Cohort Rate (Dual- Program Cohort Rate) . . . . . 59 Cohort Default Rates for Schools that Change Status . . . . . 59 Consequences Associated with Official Cohort Default Rates Above Certain Thresholds . . . . . 61 Appeal Procedures for Schools with High Official Cohort Default Rates . . . . . 62 Erroneous Data . . . . . 63 Exceptional Mitigating Circumstances . . . . . 63 General Requirements to Reduce Defaults . . . . . 65 SECTION 5: SCHOOL RESPONSIBILITIES . . . . . 67 Determining the Loan Period . . . . . 67 Disbursements . . . . . 69 Number of Disbursements . . . . . 70 Timing of Disbursements . . . . . 71 Additional Disbursement Requirements . . . . . 73 Other School Responsibilities . . . . . 75 Counseling Borrowers . . . . . 75 Entrance Counseling . . . . . 76 Exit Counseling . . . . . 78 Verification . . . . . 80 Overawards . . . . . 80 Refunds . . . . . 80 Reconciliation . . . . . 80 Student Status Confirmation Report Requirements . . . . . 80 Recordkeeping and Audits . . . . . 81 APPENDIX: TYPE OF ACADEMIC YEAR/FREQUENCY FOR ANNUAL LOAN LIMITS . . . . . 83 Standard Academic Year . . . . . 85 Making Loans for Standard Academic Years . . . . . 85 Borrower-Based Academic Year . . . . . 86 Making Loans for Borrower-Based Academic Years . . . . . 87 |