What's New For Financial Aid?
President Bush and Congress recently passed the Deficit Reduction Act of 2005 that will greatly affect financial aid for college students beginning July 1, 2006. A summary of those provisions are listed below.
Pell Grant
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The maximum Pell Grant for 2007-2008 has increased to $4,310 from the $4,050. |
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Pell eligible students who had successfully completed a "rigorous" high school program (as determined by the state higher education agency and recognized by the Secretary of Education) and enrolled full-time in the first two years of a postsecondary program are now eligible to receive up to $750 for the first year and $1,300 for the second year in the newly created Academic Competitiveness Grant. |
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Pell eligible students who are majoring in physical, life, or computer sciences, mathematics, technology, engineering or a foreign language deemed critical for national security and enrolled full-time in the third or fourth years of a postsecondary program are now eligible to receive up to $4,000 for each year in the newly created National Science and Mathematics Access to Retain Talent Grant or National SMART Grant. |
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Both the Academic Competitiveness and National SMART grants are in addition to the student's Pell Grant award. |
Stafford Loans
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Beginning July 1, 2006, interest rates for Stafford loans disbursed on or after this date will be fixed at 6.8%. |
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Beginning July 1, 2007, Stafford loans originated on or after this date will have expanded annual loan limits. They are as follows: |
- Undergraduate freshman limit increased to $3,500 from $2,625
- Undergraduate sophomore limit increased to $4,500 from $3,500
- Graduate level unsubsidized limit increased to $12,000 from $10,000
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In the FDLP, Stafford fees will be reduced on the following schedule: |
- Dropped to 3% before July 1, 2007
- Dropped to 2.5% on July 1, 2007
- Dropped to 2.0% on July 1, 2008
- Dropped to 1.5% on July 1, 2009
- Dropped to 1.0% on July 1, 2010
PLUS Loans
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Beginning July 1, 2006, the interest rate on PLUS loans disbursed on or after this date will be fixed at 8.5%. |
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PLUS origination and guaranty fees will remain at 3% and 1% respectively. |
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