By By Lauren JoffeFrom The Real College Guide
By Lauren JoffeFrom The Real College Guide
After a grueling standoff in April in which the government faced a potential shutdown, a record-breaking $38 billion federal spending budget slash was agreed upon. As the United States tries to cut back its $14 trillion in debt, college students receiving federal financial aid will be affected by some changes to their loans.
The Federal Pell Grant Program helps almost 9.6 million students attend post-secondary schooling every year. In fact, it’s the primary form of financial aid used to pay for college education. Because so many students now qualify for Pell Grants, there has been a funding shortfall that threatened a $20 billion deficit by the end of 2012. Under the recent budget cuts, Pell Grants are expected to change in the following ways:
”Year-round” Pell Grant awards, which allowed students to take out two grants in one year, will be eliminated. This new criteria will ultimately save $500 million in the upcoming year and a whopping $35 billion in the next decade.
In-school interest subsidy will be eliminated for graduate students
The current maximum Pell Grant award of $5,550 per academic year will be sustained.
In addition to Pell grants, Speaker of the House John Boehner explains that more than 40 “ineffective” programs under the U.S. Department of Education will be eliminated, including for example, Educational Technology State Grants and Legal Assistance Loan Repayment Program. (For the full list of programs to be cut, go to Speaker.gov.)
The Obama administration recognizes that these changes will pain colleges and students alike, but insists that long-term benefits will outweigh the short-term losses.
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