Students read all the Federal Updates to determine how the changes will affect your eligibility for federal student aid...
August 12, 2012
On December 23, 2011, President Obama signed into law the Consolidated Appropriations Act, 2012 (Public Law 112-74). The new law significantly impacts the Federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended (HEA).
Federal Pell Grant Program Changes -
• The Federal Pell Grant program will have a maximum award of $5,550 in award year 2012-2013. The maximum qualifying EFC (Expected Family Contribution) for Federal Pell in award year 2012-2013 is 4995.
• Federal Pell Grant program duration of eligibility has been set to twelve (12) semesters effective in award year 2012-2013 for all students.
Federal Direct Loan Program Changes -
• Direct Loan Interest Rate
○ Direct Subsidized Loans first disbursed on or after July 1, 2012 - July 1, 2013 will have an interest rate of 3.4 percent for loans made to undergraduate students. The interest rate on Direct Unsubsidized Loans made to both undergraduate and to graduate or professional students remain at 6.8 percent. (Public Law 112-141)
• Grace Period Interest Subsidy elimination
○ For Stafford Loans disbursed between July 1, 2012 - July 1, 2014 there will be no grace period interest subsidy. Loans that have been disbursed between the dates specified will have interest accruing on the loan during the six month grace period provided to students when they are no longer enrolled at least 1/2 time.
• Subsidized Stafford Loan elimination for Graduate Students
○ Effective July, 1, 2012 graduate and professional students will no longer be eligible to receive a Federal Direct Subsidized Loan. The terms and conditions of Direct Subsidized Loans received by any student for loan periods beginning before July 1, 2012, for either graduate or undergraduate study, are not affected by this change. The annual loan limit for graduate and professional students remain unchanged at $20,500.
• Elimination of Direct Loan Rebate
○ The Federal Direct Loan program will no longer offer upfront rebate on origination fees starting with loans disbursed after 7/01/12. For Stafford Loans, however, there will be no change to the percent of the loan disbursed, as the previous origination fee was 1.5% with a .5% rebate and the new origination fee is 1.0% with no rebate. For PLUS loans the origination fee was previously 4% with a 1% rebate. The origination fee remains 4% but there will no longer be a rebate.