It is a daunting task to analyze, interpret, and implement federal financial aid regulations these days. Hopefully the information I provide will help you understand and locate the financial aid you need to earn your online degree.
Changes in federal regulations for financial aid almost always begin July 1, and this year is no different. I've posted about many of these situations in the past, but I want to remind you of the federal changes that will take place next month.
- Lower interest rates!
- Interest rates on federal subsidized Stafford Loans will drop from 6 percent to 5.6 percent.
- Borrowers who have loans issued prior to July 1, 2006, will see a 1.7 percent point reduction.
- You will be paying less in interest when you go into repayment.
- The current fees taken out of your student loan disbursement is 2 percent. Beginning July 1, loan disbursements will have only 1.5 percent taken out for fees. Thus, you will receive more of your loan disbursement.
- New repayment options:
- The new Income-Based Repayment Option will enable students to cap their monthly Stafford loan repayments to no more than 15% of their discretionary (net) income. Keep in mind that discretionary income is based on 150% of the poverty line. And, after 25 years, the balance of your loan will be forgiven. This will greatly benefit low-income salaries. You will need to work with your lender.
- What will end? Students will no longer be able to apply for an economic hardship if their student loan debt is greater than 20% of their monthly income or 220% of the minimum wage rate or poverty line. Boo.
- Children of Soldiers grant is implemented to provide maximum Pell Grant eligibility for a student whose parent or guardian was a member of the Armed Forces and died while serving in Iraq or Afghanistan after 9/11/01. The student has to be under age 24, and a student at the time the parent or guardian died. However, the Department of Education has to work with the Department of Defense to identify these students, and I don't have confidence (sorry) that students will be identified any time soon.
- The Post 9/11 GI Bill takes effect. This is a very detailed program that I won't go into here, but you can get information at the Veterans Administration website.
The most significant of federal changes is definitely the veterans benefits. However, there are changes that will benefit students who take a student loan to pay for college. In addition, the Pell Grant for 2009-10 has been increased to a maximum of $5,350 for eligible students.
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About ter
I have been a financial aid advisor for nearly 25 years now! Time really does fly. Like other e-learners, I acquired my Bachelor of Arts degree and my Master of Science degree while working full time and raising a family. My coursework consisted of classroom instruction, online and independent study courses, and weekend classes.
I began in financial aid as a secretary, and have worked my way to senior level financial aid advisor at a public four year college in the Midwest. When I began in 1984, we did not have computers, so I have seen the evolution of technology and its impact on education and financial aid.
My husband and I have four children in our household. My daughter and stepson are both in college. My son and stepdaughter are high school freshman.
I look forward to being a part of eLearners.com and given the chance to educate students, especially “non-traditional” students, on the ins-and-outs of financial aid. It is a daunting task to analyze, interpret, and implement federal financial aid regulations these days. Hopefully the information I provide will help.