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发帖数: 2273 | 1 WASHINGTON (CNNMoney) -- Thousands of college students may soon feel a
financial pinch and another 100,000 may not be able to complete degrees if
Congress pushes ahead with planned changes to federal student loans,
education experts said.
Congress is expected on Friday to pass a budget to fund the federal
government over the next nine months. And the budget makes some big changes
to certain federal student loan programs.
The good news for students is the budget would set maximum level of the
popular Pell Grant awards at $5,550 -- the highest it has ever been -- for
the most financially-strapped students heading to college in fall 2012. (
Calculator: How much will that college really cost?)
But to bridge a billion-dollar gap in the Pell Grant program, Congress is
set to make it tougher for some students to be eligible for federal
financial aid.
The two most important changes: A reduction in the number of years students
can receive Pell Grant money and the temporary elimination of a six-month
grace period on interest payments on federal student loans.
My degree isn't worth the debt!
With the cost of college skyrocketing, demand for Pell Grants is at an all-
time high. Over the past three years, Congress plowed billions of dollars
more into Pell Grants. More than nine million students were awarded grants
in 2011.
But each year, lawmakers have had to scramble to find the money to maintain
the funding. A budget deal in August that raised the debt ceiling and
imposed lower federal spending requirements left Pell Grant funding $1.3
billion short.
The changes to financial aid are expected to save the government $11 billion
over the next decade, according to the House. Other changes include
requiring Pell Grant recipients to have a high school diploma or pass a
General Educational Development test.
"The rapidly rising costs of the Pell program cannot be sustained --
especially in this time of tight budgets and sky-rocketing deficits," said
Jennifer Hing, spokeswoman for the House Appropriations Committee.
But the trimming of the number of years that students can receive Pell
Grants threatens some 100,000 students and would hit African-American and
transfer students particularly hard, according to one student aid group.
Rep. Danny Davis, an Illinois Democrat, called the changes "draconian" and "
mean-spirited," adding "everybody knows that without as much education as
one can possibly get, there's very little hope for real success in life."
African-American students comprise 24% of Pell Grant recipients but make up
41% of Pell Grant recipients working toward a degree after six years,
according to the Institute for College Access & Success.
And the Pell Grant eligibility cuts will apply to all students as of July 1,
2012 -- even students already enrolled.
How I saved $50,000 in college costs
"I don't know that lawmakers realize they're going to permanently eliminate
-- for more than 100,000 students -- access to college next year, including
some who maybe a semester away from completing a degree," said Pauline
Abernathy, vice president of the Institute for College Access & Success.
Another change could add a few hundred dollars to the cost of subsidized
federal student loans issued the next two academic years. Congress would
suspend the six-month grace period on loan interest for graduates with
subsidized Stafford loans.
Stafford loan borrowers would still get a six-month reprieve upon graduation
from having to pay back their loans, but the principal on the loans would
accumulate interest during that period for loans issued between July 1, 2012
, and July 1, 2014.
Higher education experts called the change minimal but confusing, especially
for students who have to repay Stafford loans issued in years that both do
and don't qualify for the interest-free grace period.
"It's not a big hang-up for borrowers, " said Jason Delisle, an education
budget expert at the left-leaning New America Foundation. "But you'd think
that Congress would be moving in the direction of making student loan
programs less confusing."
Also the temporary elimination of the grace period comes at a time when the
interest rate on those loans is slated to double to 6.8% from 3.4%.
Paying for college keeps getting tougher. Last year, college seniors who
took out loans owed an average of $25,250, or 5% more than the class of 2009
, according to the Institute for College Access & Success.
Meanwhile, the default rate on student loans rose to 8.8% in 2010, up from 7
% in 2009, according to the Department of Education. To top of page |
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