March 28, 2024

Bucks: Most Students Spared Big Cuts in Bill

It could have been worse.

Just a few days ago, it looked as if any bill to raise the debt ceiling would get rid of subsidized federal student loans. This is the feature that allows undergraduates and graduate students who qualify to pay no interest on their student loans while they are still enrolled more than half-time in their studies.

The undergraduates were spared in the package worked out by the White House and Congressional leaders. But graduate students would no longer have access to the subsidy. See the last couple of pages of the debt ceiling agreement for the official language.

Also, people with federal student loans would no longer receive the incentive bonuses that some now get for making on-time payments. (The 0.25 percent interest rate reduction for paying through direct debit from a banking account would remain, though.)

Both changes are set to begin July 1, 2012, according to Mark Kantrowitz, publisher of the financial aid Web site finaid.org.

The upside here, and it’s a big one, according to the Institute for College Access and Success, is that the $22 billion in savings from these two changes help the Pell Grant program survive without any cuts for now.

If you are a student, or a parent of a student, tell us below how these changes could affect you.

Article source: http://feeds.nytimes.com/click.phdo?i=09211811efe8bacc23e3c7d57aabd123

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