Under the William D. Ford Federal Direct Loan Program (Direct Loan Program), the U.S. Department of Education (the Department) makes loans to help students and parents pay the cost of attendance (COA) at a postsecondary school. This volume of the Federal Student Aid Handbook provides information to assist schools in determining student and parent eligibility for Direct Loans, counseling student borrowers, and awarding Direct Loans.
Although COVID-19 continues to affect the lives of many Americans, the urgent need for waivers and flexibilities has diminished. The Federal Government ended the national emergency and the public health emergency associated with the pandemic. The COVID-19 national emergency ended on April 10, 2023, through enactment of H.J. Res. 7, Public Law No. 118-3. The COVID-19 public health emergency ended on May 11, 2023. These actions triggered the sunset of many waivers and flexibilities for the Title IV, Higher Education Act of 1965 (HEA) programs related to the COVID-19 pandemic.
The Department of Education recognizes that the COVID-19 pandemic created many unique challenges for postsecondary institutions. The Department provided a variety of special guidance and regulatory flexibilities due to the President’s declaration of the COVID-19 national emergency on March 13, 2020. In addition, Congress passed legislation offering relief from certain statutory requirements related to the Title IV, HEA programs.
In general, the COVID-19 flexibilities and waivers remained in effect until the COVID-19 national emergency was declared over. For more details, see the Electronic Announcement published June 14, 2023, which describes the timeframes for the sunset of the COVID-19 waivers and flexibilities applicable to institutions and provides general guidance regarding the return to normal compliance with Title IV requirements.
Volume 8 was new to the Federal Student Aid Handbook for 2023-2024. We have made the following changes for 2024-2025:
To reflect changes made by the FAFSA Simplification Act, throughout Volume 8 we have replaced the terms “Expected Family Contribution (EFC)” and “estimated financial assistance (EFA)” with the terms “Student Aid Index (SAI)” and “other financial assistance (OFA),” respectively. For more information on these changes, see Dear Colleague Letter GEN-23-11.
We have changed how examples and tables are numbered. In the 2023-2024 FSA Handbook, examples and tables were numbered sequentially throughout the entire volume. For instance, if the last example in a chapter was “Example 5,” the first example in the next chapter was numbered “Example 6.” Examples and tables are now numbered sequentially within each chapter or appendix, and the numbering then starts over with “Example 1” (or “Table 1”) when a new chapter begins. In addition, each example and table is now preceded by the volume and chapter in which it appears (for example, “Volume 8, Chapter 1, Example 1”).
In Chapter 2, we have revised the discussion under the heading “Required Entrance Counseling Content: Direct Subsidized Loan and Direct Unsubsidized Loan Borrowers” by removing requirements related to providing information on pre-dispute arbitration agreements and class-action waivers. Final regulations published on November 1, 2022, eliminated these entrance counseling requirements effective July 1, 2023, but they were inadvertently retained in the 2023-2024 FSA Handbook.
In Chapter 3, in the “Origination Overview” section, we have added guidance previously included in Volume 5 of the FSA Handbook stating that the cost of attendance used in determining the Direct Loan amount that a student is eligible to receive may include only those costs associated with the period of enrollment for which the loan is originated.
To reflect a change made by the FAFSA Simplification Act, we have added a new section under the heading “No Alternate SAI When Originating Loans for Periods Other Than Nine Months” in Chapter 3 explaining that there are no alternate SAIs comparable to the alternate EFCs that were previously used when originating Direct Loans for periods of enrollment other than nine months. We have also added a new example to illustrate how the lack of alternate SAIs may affect eligibility for Direct Subsidized Loans in this circumstance.
Existing policy guidance on certain exceptions to normal loan period disbursement requirements for Direct Loans when clinical work is included in a standard term has been added to the Handbook in a new section at the end of Chapter 3.
In Chapter 4, for greater clarity we have revised the text under “Checking Remaining Eligibility Under the Aggregate Loan Limits,” “Effect of a Change in Student Status on Aggregate Loan Limits,” and “Volume 8, Chapter 4, Example 3: Aggregate Loan Limits and Additional Direct Unsubsidized Loan Amounts When Parents Are Unable To Obtain Direct PLUS Loans” (Example 3 was numbered Example 5 in Volume 8, Chapter 4, of the 2023-2024 FSA Handbook).
In Chapter 5, we have revised the examples on prorating loan limits for students who graduate early from clock-hour programs to be more consistent with the way annual loan limits are explained elsewhere in Volume 8.