Late this afternoon the Department of Education posted an electronic announcement (EA) on IFAP regarding implementation of sequestration cuts. The EA provides some new information on loan origination fee increases and TEACH Grants. Loan origination fees will increase on federal student loans where the first disbursement of the loan is after the sequester takes effect (March 1). FSA will send notices to students and parents whose first disbursement is after the date sequestration takes effect.
In addition, ED clarified that TEACH Grants are also subject to the across-the-board cuts under the sequester. (Initially NASFAA had thought TEACH Grants might not be immediately affected by sequestration.) Any reduction in the amount of a TEACH Grant would apply to awards where the first disbursement was made during the time the sequester is in effect (March 1). ED recommends that schools not make a first disbursement of any TEACH Grants until further information is available.
NASFAA will continue to share information as it becomes available.