Student Loan Interest Rates Set to Fall; Pell Grant to Increase
A number of important changes are looming for federal student aid, which may save you some serious cash. Here’s a quick look at the most significant developments:
- Interest rates on subsidized Stafford loans are dropping — This year, they will go from a 6% to 5.6% (fixed). Under the College Cost Reduction and Access Act of ’07, the rate will continue to drop until 2011-2012, when it will reach an all-time low of 3.4%. Unfortunately, the lower rate only applies to loans taken out — or consolidated — in that academic year. Remember, with a subsidized loan, the federal government pays your interest while you are in school.
- Income-based loan repayment — I won’t bother rehashing the details, since I’ve covered them extensively in earlier posts. Bottom line is this: If you qualify, you will save a bundle every month.
- The Pell Grant is increasing — The maximum annual amount will increase next fall from $4,731 to $5,350. If your family earns less than $50,000 per year, you likely qualify for the Pell Grant, so be sure to complete your FAFSA (Free Application for Federal Student Aid).
What do you do if federal student aid is still not enough to help you cover your education costs? It’s time to expand your search for scholarships. Don’t forget to check out our weekly Scholarship Announcement post every Friday. And now you can get even more information on specialized scholarships through our brand new Student Scholarship Search page. Check it out today!