October 17, 2013 - Update on Government Shutdown

Hello SCASFAA,

If you haven’t heard already, the Government Shutdown is over…temporarily.  Last night a continuing resolution (HR2775) was passed to reopen the Federal Government until January 15th, 2014.   This legislation also allows the debt ceiling to be raised enough to fund the government’s current operational expenses until February 7th, 2014. 

What does this mean?

Federal Agencies are reopening:

As you can imagine there will be a back log of work, so we can’t expect immediate action but we know that these agencies will be available to us as needed.  Here are the aspects that affected us:

IRS Tax Return Transcripts:         

The IRS offices were closed and as such these could not be picked up in office.  IRS Data Retrieval and Web Ordered forms were still being processed.  Applicants should be able to go to those offices now.

E-Verify:

New Work Study students were not able to be verified on the E-Verify system.  That site should be reopening.

Selective Service:

The customer service number was not operational.  That should be reopening.

Veterans Affairs:

Call centers were not open, but should be reopening now.

      Sequestration:

Sequestration will continue, as scheduled.  This affects Financial Aid in the following ways:

               

Direct Loans:

Awards with a first disbursement on or after December 1st, 2013 will have a loan fees increased:

Subsidized: 1.072%  (currently 1.051%)

Unsubsidized: 4.288% (currently 4.204%)

PLUS: 4.288% (currently 4.204%) [graduate and undergraduate]

Schools may begin sending loans with these new interest rates to COD on October 18th.

Iraq-Afghanistan Service Grant (IASG):

Awards with a first disbursement on or after October 1st, 2013 must be reduced by 7.2%.

Those awards prior (in FY 2013) were reduced by 10%.

TEACH Grants:

Awards with a first disbursement on or after October 1st, 2013 must be reduced by 7.2%.

Those awards prior (in FY 2013) were reduced by 6%.

Campus Based Funds:

No adjustments are announced at this time.

      No FY 2014 Budget:

There is no agreed upon budget for Fiscal Year 2014.  This will be revisited over the next few months. 

Until an appropriation bill is passed the 2014-2015 Pell Grant amount will not be announced. 

      All of this may happen again.

We can fully expect another set of tough negotiations come January, with deadlines being met and maybe even passed.  Any other comments at this time would be merely speculation and we’ll leave that to the “news” channels.

Thank you,

Kenneth Cole

Legislative Relations Committee member.