The year 2007 brought about some changes in financial aid. Actually, some became effective in 2006, but had the greatest impact in 2007. Most significantly, annual federal loan limits increased for the first time in almost two decades. While legislators saw this as a means to support students in their education, it also puts you deeper in debt. Also, even though the annual federal loan limits increased, the aggregate loan limits you can borrow over the course of your entire education did not. What this means is you may hit your overall level of loan eligibility prior to completing your education.

However, changes made by the Higher Education Reconciliation Act of 2005 have enacted some positive changes to the financial aid system. Students may not realize the direct impact of these changes, but they have been beneficial for calculating financial aid eligibility. Some of these changes were:

• Courses offered through telecommunications were no longer considered correspondence courses. Schools that offer over 50% of their courses through telecommunications can now award federal financial aid to their students.
• Previously, students enrolled in less than half time could not have a room and board cost built into their cost of attendance. Financial aid administrators can now include room and board costs for up to three terms of less than half time enrollment, but only two of those terms can be consecutive. If you fall into this category, check with your financial aid administrator to see if room and board costs added to your cost of attendance can increase financial aid eligibility.
• Behind the scenes, the Federal Methodology used by the Department of Education to determine the Expected Familly Contribution, a guideline used to calculate aid eligibility, was changed to benefit students. Student income up to $3,000 was protected (used to be $2,000) and only 20% of assets was counted against you rather than the previous 30%. The outcome of these changes may have resulted in a lower Expected Student Contribution, which meant an increase in financial aid eligibility.
• Also, student qualified education benefits, such as the Coverdell savings plan, 529 pre-paid tuition plan, or 529 savings plan, were no longer treated as a financial aid resource, nor were they used as an asset against the student if the plan was in the parent's name. The parent would report these plans as their assets. Again, this could have meant a reduction in the Expected Student Contribution since the parent's assets have a higher protection allowance.
• For you courageous souls serving on active duty (for purposes other than training) in our military, you are now considered an independent student even if you are still serving on active duty. In the past, only those considered veterans qualified. Now, you can take classes while on active duty and be considered an independent student for financial aid.

Our legislators still have a long road to travel to make education affordable, and students have an even longer road trying to save for college. I always encourage you to contact your legislators to request increased funding in the Federal Pell Grant program, and completely overhaul the FAFSA application.

Have a safe and happy new year's eve!

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