Earlier this year the United States came very close to a government shutdown. Even after everything was resolved most Americans still had questions, students especially were wondering what would happen to financial aid.
As tuition increases continue the availability of financial aid has slowly been decreasing. Financial aid changes that were part of the debt ceiling talks are now confirmed and there is a bit of good news, and some bad news.
- Funding for Pell grants was increased. The amount of money eligible students will receive did not increase, but it does mean that more students will be awarded the grant which is important as more and more students decide to go back to school.
- Graduate school students will no longer have subsidized loans. Beginning July 2012 students will accrue interested while in school and during grace, deferment and forbearance periods. The best way to combat this situation is to continue paying your accrued interest while you attend grad school.
- One repayment incentive has been cut, while the other is still in effect. Students who made their first 12 repayments on time would usually get a discount on their loan origination fee. Beginning in July this discount will no longer be available. However, students will still be eligible for a reduction of 0.25% on your interest rate if you set up loan payments that are automatically withdrawn from your bank account each month.
Students still have some time before these changes go into effect to get their financial aid in order. Scholarships and grants are still available, and if you need to borrow look for federal subsidized loans first just keep in mind that these changes could affect you in the future.