Publication Date: December 24, 2013

DCL ID:  GEN-13-27

Subject: IMPORTANT UPDATE: Change to FY 2014 Sequestration-Required Reduction for TEACH Grant

Summary: This letter informs institutions of a change in the percentage reduction that will apply to TEACH Grants first disbursed during Federal Fiscal Year 2014 (FY 2014).

In Dear Colleague Letter GEN-13-22, published on October 17, 2013, we informed institutions that the sequestration-required reduction that must be applied to TEACH Grants first disbursed on or after October 1, 2013 and before October 1, 2014 would be 7.2 percent. We have recently been informed that the Office of Management and Budget (OMB) has recalculated the FY 2014 sequester-required reduction percentage for the TEACH Grant Program. The revised reduction is 0.89 percent decreased from the 7.2 percent reduction announced in the October 17, 2013 letter.

There is no change to the Iraq-Afghanistan Service Grant award reduction of 7.2 percent or the increased Direct Loan origination fee amounts that were announced in the October 17, 2013 letter.

We understand that applying the revised TEACH Grant reduction percentage could impose additional burden on institutions. However, the recalculated reduction percentage increases the amount of a student’s TEACH Grant award by more than six percent, an increase of about $250.00. Therefore, an institution that has already disbursed, or that will disburse, TEACH Grant awards with a first disbursement date on or after October 1, 2013 and before October 1, 2014 must adjust the award amounts to reflect the new reduction percentage of 0.89 percent and disburse the additional funds to the affected students. Institutions must also update any TEACH Grant information that was previously reported to COD.

Once again, we thank you for your patience and understanding.


Jeff Baker, Director
Policy Liaison and Implementation
Federal Student Aid


GEN-13-27 - Sequestration Required Changes to the TEACH Grant Program in Microsoft Word format, 41KB, 1 Page


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