Federal Aid

The FAFSA has been streamlined with a reduced number of questions and a more dynamic web form, making it less daunting for students and their families.

Previously, users had the option to enter their tax information manually or use the IRS Data Retrieval Tool. Beginning with 2024–25, all persons on the FAFSA must provide consent for the Department of Education to receive tax information or confirmation of non-filing status directly from the IRS. In a very small number of cases, students and families will have to enter their tax data manually, but for most, that data will be automatically transferred into the application. This change makes it easier to complete the FAFSA and reduces the number of questions to be answered.

Because the new form is dynamic, students and parents will only see questions related to their respective roles. The form will request contributors’ information and email addresses to notify them to complete their portion of the form.

A contributor—a new term being introduced on the 2024–25 FAFSA—refers to anyone who is required to provide information on a student’s form (such as a parent/stepparent or spouse). A student’s or parent’s answers on the FAFSA will determine which contributors (if any) will be required to provide information.

Contributors will receive an email informing them that they’ve been identified as such, and will need to log in using their own FSA ID (if they don’t already have one) to provide the required information on the student’s FAFSA.

Being a contributor does not mean they are financially responsible for the student’s education costs, but it does mean the contributor must provide information on the FAFSA or the application will be incomplete and the student will not be eligible for federal student aid.

A notable terminology update within the new FAFSA is the replacement of the term Expected Family Contribution (EFC) with the Student Aid Index (SAI). This name more accurately describes the number used to determine aid eligibility and, unlike the EFC, the SAI may be a negative number down to -1500.

Previously, the FAFSA calculated the number of household members attending college into the EFC, dividing it proportionately to determine federal aid eligibility. Beginning with the 2024–25 FAFSA, the application will still ask how many household members are in college, but your answer will not be calculated into the SAI.

Families making less than 175% and single parents making less than 225% of the federal poverty level will see their students receive a maximum Federal Pell Grant award. Minimum Pell Grants will be guaranteed to students from households below 275%, 325%, 350%, or 400% of the poverty level, depending on household structure. Pell awards between the maximum and minimum amounts will be determined by SAI.

For dependent students, financial information was previously needed from the parent(s) the student had lived with the most in the last 12 months. With the new FAFSA, financial information will be required from the parent(s) who provided the most financial support to the student.

When required, families must now report the value of their small business or family farm. If the family farm includes the principal place of residence, applicants should determine the total net value of all farm assets and subtract the net value of their principal residence to determine the final value of their farm assets.

The Federal Pell Grant is a need-based grant awarded to undergraduate students pursuing their first baccalaureate degree only. Eligibility is based on federal methodology and Pell lifetime eligibility usage limits. The award amounts for the 2024-2025 academic year range from $740 to $7,395, are subject to Congressional appropriations and will be reduced for students who enroll as less than full-time students each semester. If your award letter shows an “estimated” Pell Grant, it means your final official FAFSA has not been received by our office.

A student’s initial Pell Grant award anticipates full-time enrollment. Per federal regulation, the enrollment status at the time of the Pell Recalculation Date (PRD) will determine what percentage of the Pell award is applied to the student’s account. Any student falling below full-time enrollment will have their aid adjusted appropriately. Mercer strongly encourages students to finalize their course schedule BEFORE the PRD and avoid making schedule changes affecting enrollment status until AFTER the PRD.

Federal regulation also requires students to begin attendance in all coursework included in Pell enrollment status. Students who fail to begin attendance in all courses included in the enrollment status calculation will have their Pell Grant adjusted and will be responsible for repaying the University for any excess Pell funds received.

The Federal Supplemental Educational Opportunity Grant is a need-based grant awarded to qualified undergraduate students pursuing their first baccalaureate degree only. Eligibility is based on the availability of funds and the federal methodology using the information you and your parent(s) provided on the FAFSA. Priority is given to students who have are Pell-eligible and who meet priority filing deadlines.

The Teacher Education Assistance for College and Higher Education (TEACH) Grant Program provides grants of up to $4000 per year to students who intend to teach in a high-need field at a public or private elementary or secondary school that serves students from low-income families. Find more information about the TEACH Grant at Mercer.

In exchange for receiving a TEACH Grant, you must agree to serve as a full-time teacher in a high-need field in a public or private elementary or secondary school that serves low-income students.  As a recipient of a TEACH Grant, you must teach for at least four academic years within eight calendar years of completing the program of study for which you received a TEACH Grant.  IMPORTANT: If you fail to complete this service obligation, all amounts of TEACH Grants that you received will be converted to a Federal Direct Unsubsidized Loan.  You must then repay this loan to the U.S. Department of Education (ED).  You will be charged interest from the day the grant was disbursed.

Applications for the TEACH grant must be completed in Mercer Student Forms and are subject to review by the Office of Student Financial Planning.

Federal Direct Loans are low-interest (variable rate) loans awarded by the school and provided by the federal government. The interest rate is adjusted each July 1.  These loans may be either subsidized or unsubsidized. You can view interest rates online at studentaid.gov.

Interest rates for loans first disbursed on or after July 1, 2024 through June 30, 2025

Direct Subsidized and Direct Unsubsidized Loans – Undergraduate Students – 6.53%

Direct Unsubsidized Loans – Graduate Students – 8.08%

Direct PLUS Loans – Parents and Graduate or Professional Students – 9.08%

Sample Federal Direct Loan Disclosure Statement

Federal Direct Loan amounts are based on the cost of attendance at a particular school and the student’s grade level.

Dependent students may borrow the following amounts:

$3,500/year for 1st-year undergraduates subsidized and $2,000/year unsubsidized.
$4,500/year for 2nd-year undergraduates subsidized and $2,000/year unsubsidized.
$5,500/year for 3rd or 4th-year undergraduates subsidized and $2,000/year unsubsidized.

The aggregate loan limit that an undergraduate dependent student can borrow is $31,000.

Independent students may borrow the following amounts:
$9,500/year for 1st-year undergraduates (at least $6,000 must be unsubsidized).
$10,500/year for 2nd-year undergraduates (at least $6,000 must be unsubsidized).
$12,500/year for 3rd or 4th-year undergraduates (at least $5,000 must be unsubsidized).
$20,500/year for graduate students (unsubsidized only).

The aggregate loan limit that an undergraduate independent student can borrow is $57,500.

The amounts listed above are maximums. Remember, a student may not borrow more than their program’s Total Cost of Attendance minus other financial aid and/or scholarships.

Subsidized Federal Direct Loan

Subsidized Federal Direct Loans are awarded to undergraduate students ONLY. Subsidized Federal Direct Loans are need-based loans. A student must be enrolled at least half-time (6 credit hours for undergraduate students) to be eligible to receive a Subsidized Federal Direct Loan.

The interest on this loan is paid by the federal government while the student is enrolled in school and during the first 6 months following withdrawal or graduation from school. Interest starts accruing anytime that your enrollment status drops below half-time. The six months following departure from school is a grace period. A student is only given one grace period. After this period, the student must begin repayment of the loan.

Graduate students are NOT eligible for subsidized loans.

Unsubsidized Federal Direct Loan

Unsubsidized Federal Direct Loans are non-need-based loans. Interest is charged from the time the loan is disbursed until the loan is paid in full. The student can choose to pay the interest while enrolled or allow it to accrue. If the interest is allowed to accrue, it will be added to the principal amount of the loan, thereby increasing the amount of money the student is required to repay.  The student must be enrolled on a half-time basis (6 credit hours for undergraduates & 5 credit hours for graduates/professionals) to be eligible and to receive the award.

To receive a Federal Direct PLUS Loan, you must:

• Be a graduate or professional degree student enrolled at least half-time at an eligible school in a program leading to a degree/certificate, OR
• Be the parent (biological, adoptive, or in some cases stepparent) of a dependent undergraduate student enrolled at least half-time at a participating school;
  • If you are the biological parent of the student but you are not listed on the student’s FAFSA, you will need to complete a Parent PLUS Loan Attestation Form with your PLUS application.
• Not have an adverse credit history; AND
• Meet the general eligibility requirements for federal student aid.  If you are borrowing on behalf of your child, your child must also meet these requirements.

Repayment for Federal Direct PLUS loans generally begins within 60 days of the loan’s disbursement. The interest rate is currently 9.08% (for PLUS loans disbursed 7/1/2024 through 6/30/2025).

In addition to the FAFSA, borrowers must complete a separate PLUS loan application each year. The maximum amount which can be borrowed each year is equal to the Cost of Attendance for the enrolled program of study, minus any other financial aid the student is receiving.

If the loan is denied due to an adverse credit history, the borrower will be notified by the Direct Loan Servicing Center.

Adverse credit history is defined by the Department of Education to be the following:

Applicant found to have adverse credit conditions such as bankruptcy, foreclosure, tax lien, or a default determination, etc.

OR

The applicant has one or more debts that are 90 or more days delinquent, in collection, or have been charged off during the two years preceding the date of the applicant’s credit report and the total combined outstanding balance of those debts is greater than $2,085.

If you have received an adverse credit decision, you may still be eligible to receive a Direct Plus loan. To become eligible, you may take one of the following actions:

1. Obtain an endorser and complete Plus Credit Counseling.

An endorser is someone who does not have an adverse credit history and agrees to repay the loan if you do not repay it.
If you are a parent borrower, the endorser may not be the student on whose behalf you are requesting the Direct Plus loan.

2. Document to the satisfaction of the U.S. Department of Education that:

• The information causing the adverse credit decision is incorrect, OR
• There are extenuating circumstances relating to the adverse credit history (NOTE: Endorsers are not eligible for this option), AND
• Complete Plus Credit Counseling. If the applicant completes the Plus Credit Counseling more than 30 days prior to the credit check, Plus Credit Counseling will need to be completed again.

For Parent PLUS loans, the student is not eligible to endorse the PLUS Loan. If the parent does not wish to pursue the PLUS Loan further, the student may be eligible to receive additional Federal Direct Unsubsidized Loans. Please contact the Office of Student Financial Planning for additional information.