GRANTS AND LOANS
The Federal Pell Grant, is a grant that does not have to be repaid. A student’s eligibility for a Pell Grant is calculated using a formula developed by the U.S. Congress and information submitted by the student on the Free Application for Federal Student Aid (FAFSA). The amount awarded to a student depends on the student’s financial need which is determined by the cost of attendance, expected family contribution (EFC) and enrollment status (full-time, 3/4 time, half-time, or less-than-half-time). The Federal Pell Grant has a maximum lifetime eligibility of 600% or 12 semesters of eligibility. Only Undergraduate students are eligible for the grant; therefore, once you have earned a baccalaureate degree, or your first professional degree, or have used up all 12 semesters of your eligibility, you are no longer eligible to receive a Federal Pell Grant.
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This program is another form of aid that does not have to be repaid. However, unlike the Pell Grant program, it is not based on financial need. The Iraq and Afghanistan Service Grant Program (IASG) is intended to assist students who are not Pell-eligible, but whose parent or guardian died as a result of military service in Iraq or Afghanistan after September 11, 2001 and who, at the time of the parent’s or guardian’s death, were less than 24 years old or were enrolled in college at least part-time. The amount awarded to any eligible student is equal to the maximum Pell Grant for the award year, not to exceed the cost of attendance.
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Federal loans provided through the William D. Ford Federal Direct Loan Program are referred to as Direct Loans, because the federal government, through the U.S. Department of Education, is the lender. Unlike grants, student loans are borrowed money that students are legally obligated to repay, with interest. Students must maintain an enrollment status of at least half-time to be eligible for Direct Loans. Additionally, all first-time Direct Loan borrowers must complete a Master Promissory Note (MPN) and Entrance Counseling before funds will be disbursed. Repayment begins after a six (6)-month grace period following graduation, withdrawal from school, or if the student’s enrollment status is less-than-half-time.
Direct Loan options for eligible SDI associate degree and certificate-seeking students include:
- Direct Subsidized Stafford Loans
Subsidized loans are awarded only to undergraduate students on the basis of financial need. If a student is eligible for a subsidized loan, the U.S. Department of Education will pay (subsidize) the interest on the loan while the student is in school, for the first six (6) months after the student leaves school and during periods of deferment.
- Direct Unsubsidized Stafford Loans
Unlike subsidized loans, the borrower is responsible for interest that accrues on Direct Unsubsidized Loans from the time the loan is disbursed until it is paid in full and financial need is not required to receive an unsubsidized loan. Direct Subsidized and Unsubsidized Loans have annual loan limits based on the student’s dependency status, grade level, and lifetime aggregate limits.
When borrowing Direct Loans, it is important to understand that those loans will be required to be paid with interest. In addition, loan fees are assessed at the time of disbursing loans. This means, the total loan amount will be less the loan fee; however, you will still be responsible for repaying the full amount. Interest rates and loan fees are updated annually.
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When a student withdraws from the Institute, federal regulations specify how the school must determine the amount of Title IV program assistance, also referred to as FSA funds, that was earned. The Title IV programs administered by SDI that are covered by this law are:
- Federal Pell Grants
- Iraq and Afghanistan Service Grants
- Direct Loans
If the student (or Institute, on the student’s behalf) received less assistance than the amount earned, the student may be able to receive those additional earned funds. If the student received more assistance than earned, the excess funds must be repaid by the student and/or returned by SDI.
The Institute will use a Department of Education approved refund calculation that determines the percentage of Title IV funds earned by the student. If the student did not receive all of the funds earned, the student might be due a post-withdrawal disbursement. If the post-withdrawal disbursement includes loan funds, the Institute must obtain the student’s written permission before disbursing funds. Any post-withdrawal funds must be disbursed within 30 days of the date of determination of the student’s withdrawal.
There are some Title IV funds that a student might have been scheduled to receive that cannot be disbursed once the student withdraws because of other eligibility requirements. For example, if the student is a first-time, first-year undergraduate student and has not completed the first 30 days of his/her program before withdrawal, then the student will not receive any Direct Loan funds that would have been received if the student remained enrolled past the 30th day. If a student receives excess Title IV program funds that must be returned, the Institute must return a portion of the excess equal to the lesser of:
- Student’s institutional charges multiplied by the unearned percentage of the student’s funds,
- Entire amount of excess funds
The Institute must return this amount even if it did not keep that amount of the student’s Title IV program funds. If the Institute is not required to return all of the excess funds, the student is responsible for the remaining amount. Any loan funds that the student must return must be repaid in accordance with the terms of the Master Promissory Note. That is, the student may make scheduled payments to the holder of the loan according to the agreed upon repayment plan.
The requirements for Return of Title IV program funds when a student withdraws are separate and different than the SDI Institutional Refund Policy (see Refund Policy). Therefore, the student may still owe funds to the Institute to cover unpaid institutional charges.
Federal Student Aid Resources