ARCHIVE NEWS: It was bad news for the financial aid world when the Senate approved the Budget Reconciliation Act of 2005, S. Bill 1932.
In a nutshell this legislation cut over $41 billion dollars of federal financial aid over a five year period. If you are currently seeking financial aid you must know that the timing couldn’t be worse. College tuition is the highest it has ever been in history and is expected to rise.
The following points are the key pieces of the legislation that effect financial aid beginning July 2006:
Stafford Loans will be increased from a 4.7% to to a 6.8% fixed rate PLUS (Parent Loans for Undergraduate Students) will be increased from a 6.1% to a 8.5% fixed rate Low income students that qualify for Pell Grants may qualify for newly created Smart Grants intended for students who major in math, science and certain foreign languages deemed “important” for national security Extends PLUS loans to graduate and professional students Increases limits on federal loans to approximately $3,500 for first and second year students and $4,500 for juniors and seniors Created a provision for deferral for those students who are on active military duty Increases student loan origination fees
If you already receive financial aid or have received financial aid do more research on what this means or could mean for consolidation of your loans.