2012-2013 Change in Student Aid
In the Summer of 2011, Congress passed the Budget Control Act of 2011 which contained provisions related to student financial aid. The main changes are:
Federal Subsidized Stafford Loans for Graduate Students: Elimination of the subsidy component in the Federal Subsidized Stafford loan for graduate students. This elimination for graduate students helps to shore up funding for the Federal Pell Grant program which aids low-income undergraduate students. What this means to Rollins students:
- Graduate students who received Federal Subsidized Stafford loans in the past will now see the interest begin to accrue on any new loans issued after July 1, 2012.
- Federal Subsidized Stafford Loans disbursed prior to July 1, 2012, will retain their interest subsidy. This Act applies only to new graduate loans issued after July 1, 2012.
- The total amount graduate students may borrow under the Federal Stafford Loan program remains at $20,500.
- Please note: Undergraduate loans do not change.
Federal Pell Grants: Elimination of the "Year-Round" Federal Pell Grant for students who already received 100% of their annual Federal Pell Grant. What this means to Rollins students:
- In general, no change for students. During the summer of 2011, some students were able to take advantage of the "Year-Round" Federal Pell Grant. However, prior to the summer of 2011, no student could receive more than 100% of their Federal Pell Grant eligibility.
- Students may receive up to 100% of their Federal Pell Grant between the Fall, Spring, and Summer semesters.
- Further information will be available in the Spring 2012.
Direct Loan Repayment Incentives: The incentive for using automatic debit repayment provided borrowers with a 0.25 interest rate reduction and the up-front interest rebate incentive was equal to 0.5 percent of the loan amount and applied toward the 1 percent loan origination fee. For PLUS loans, the up-front interest rebate was 1.5 percent applied toward the 4 percent origination fee. Borrowers were able to keep the rebate if they made their first 12 payments on time. The language prohibits the Department of Education from authorizing or providing repayment incentives on new loans disbursed on or after July 1, 2012, except that an interest rate reduction may be provided to a borrower who agrees to automatically debited electronic payments.
For additional information, please read information on the Budget Control Act of 2011 at http://www.cbo.gov/ftpdocs/123xx/doc12357/BudgetControlActAug1.pdf.
