What is New in Student Financial Aid This Fall

By Ginny Estupinian

As we approach the beginning of the new academic  year,  it is good to know what has changed in the world of financial aid so that you can be best prepared to make the most out of it. Here is a brief overview:

Pell Grant Changes

 The maximum annual Pell Grant will increase to $5,350 from $4,731. These are federal awards that don’t need to be repaid. In order to qualify for these grants the applicants income must not exceed $50,000 annually. In order to apply for this grant simply fill out the Application for Federal Student Aid.

 Student Loans

 The good news for those taking out a new subsidized Stafford undergraduate loan, is that the interest rate will now be 5.6% instead of 6.0%.  These loans are need based and have different amounts available base on the year you are in. For example: a maximum loan amount of $3,500 per year for Freshman, $4,500 per year for Sophomores, $5,500 per year for Juniors and Seniors. 

 In these types of loans the government pays the interest on these loans while the student is in school.  Students with unsubsidized loans, available regardless of financial need, must pay their own interest or ask to defer it. 

 Student loan interest rates have been dropping since the 2007-2008 academic year and will fall to 3.4% by the 2011-2012 year.  The rates are only applicable to loans originated in that given academic year. It Is important to note that you cannot retroactively apply this rate to loans from the previous school year.

 What About Graduate Student Loans?

 Interest rates for Graduate and Parent PLUS loans, loans that graduate students take out for themselves or parents take out for their undergraduate children, remain at 7.9% in the direct lending program and 8.5% in the Federal Family Education Loan Program.

 Subsidized loans for graduate students remain at 6.8%.

 What If You Have Old Loans?

 People who borrowed from federal sources between July 1, 1998, and June 30, 2006, have variable interest rates pegged to the May 91-day T Bill auction.  The rate is at a historic low of 2.48% versus 4.21% last year, during the repayment period and 1.88% versus 3.61% while the student is in school and during the six-month post-graduation grace period. If you are concern that interest rates may rise again in July 2010, you may want to look into consolidating those loans that you got before 2006.

As always, this is just a brief overview to give you a heads-up of what is available. Make sure that you look over all your options with a qualified financial aid counselor.

The New Benefits of the GI BILL

By Ginny Estupinian

The “post-9/11″ GI Bill that takes effect on Aug. 1 2009 and offers some great benefits for Veterans returning to school or just finishing a college education.  It’s the most comprehensive package of education benefits for service members since the original GI Bill of Rights was signed during World War II. The new GI Bill invests $2 billion in educating U.S. military personnel and veterans of Afghanistan and Iraq at colleges and universities nationwide.

The new benefits package pays tuition, but also offers a monthly housing stipend and up to $1,000 a year for books and supplies. This increase in benefits are expected to increase the number of veterans going to school in the next two to three years by 20 percent, according to the U.S. Department of Veterans Affairs.

The original GI Bill failed to keep pace with the rising costs of higher education, said the new bill’s sponsor, Sen. James Webb, D-Va. The post-9/11 bill provides enough money for veterans to consider even private colleges. Where before under the old benefits it would be very difficult to do.

The new bill covers more than 1.8 million veterans who have served in the Armed Forces since Sept. 11, 2001. The bill also covers Reserve and Guard members who were activated for more than 90 days.

An important thing to remember is that Veterans have 15 years after they leave active duty to use the benefits.

Here is a quick breakdown:

Post-9/11 GI Bill

What it is: Enhanced education benefits for military veterans of Afghanistan and Iraq

What it covers: Tuition and fees at any public college and many private ones; monthly housing stipend; books and supplies; one-time relocation allowance

Information: Interested veterans are encouraged to apply on-line at http://vabenefits.vba.va.gov/vonapp/main.asp;

The Fund for Veteran’s Education

By Ginny Estupinian

As I have previously discussed in this forum, paying for educational expenses after the service is challenging and at times it feels like it is just not possible.  At times veterans can not even use the G.I. Benefits because it decreases other financial aid.  Recently, I came across a non profit organization that has a scholarship that is helping bridge the financial gap.  The Fund for Veterans’ Education is a scholarship that is basically available to veterans who were deployed for at least 60 days to Afghanistan, Iraq, or served in the surrounding areas.  The fund provides a maximum scholarship of $36,396 that is available over four years.  Based on the information that I read,  a veteran can use this scholarship along with other forms of financial aid. Therefore, before applying for this scholarship it is necessary that interested veterans first apply for financial aid.

If you would like more information or simply want to apply you can do so at : http://www.veteransfund.org/