just found this:
http://www.smartmoney.com/personal-finance/college-planning/will-obamas-new-aid-plan-help-you-pay-for-college/"Will college students, or their parents, be able to qualify for more financial aid?
Yes. Students will see increases in the Pell Grant, work-study, unsubsidized Stafford loan eligibility and the Hope Scholarship tax credit. The details:
* The Pell Grant (these are typically for families with income of $50,000 or less) will increase by $500 per recipient. The number of students who qualify will increase by about 800,000 to a total of seven million recipients.
* Federal work-study programs will receive a funding boost of $490 million, enough to add 200,000 work-study jobs.
* Unsubsidized Stafford loan limits will increase by $2,000 per year, to a total of $8,000 over four years.
* The Hope Scholarship tax credit would increase to $2,500 from the current $1,800. Until now the tax credit could only be used to offset any tax liability, meaning low-income families who don’t owe taxes couldn’t take advantage of it. Should the bill pass, the credit will be 40% tax-refundable, putting up to $1,000 directly into families’ pockets. Eligibility will be greatly expanded as well: Phase-out starts at $80,000 to $90,000 in annual income for individual tax filers and $160,000 to $180,000 for families, nearly double the current phase-out limits.
Will it be easier to get federal student loans?
That depends on the type of loan you seek. Luckily, the credit crunch has not affected students’ ability to get federally-guaranteed Stafford loans. (In May 2008 the Insuring Continued Access to Student Loans Act of 2008 was passed, providing liquidity to lenders so they could continue offering Stafford loans). However, PLUS loans, which are federally-subsidized loans for parents, have become a lot more difficult to obtain since eligibility is partly determined by the applicant's creditworthiness. Any applicant who experienced a foreclosure, bankruptcy, repossession, tax lien or wage garnishment in the past five years, or a delinquency on any debt of 90 or more days is no longer eligible. “There has been a sharp decrease in PLUS loan volume
,” says Kantrowitz. Unfortunately, the stimulus package does not address that problem.
Will it be easier to get private student loans? Will the terms get better?
Thanks to the credit crunch, private loans have become extremely difficult to obtain and more expensive as well. Interest rate hikes of between 2% and 4% have become common, Kantrowitz says. There are fewer lenders -- 39 of 60 lenders have stopped making private student loans -- and the remaining lenders have adopted more stringent credit-writing criteria.
Would more financial aid mean that I could put less money in investments like my 529 savings plan?
Absolutely not. Keep in mind that despite the impressive size of the overall package, we’re only talking about a $500 increase in the Pell Grant and a $2,000 increase in unsubsidized Stafford loan limits. If your child is headed to college in five or more years, chances are tuition inflation will far outpace the relief your family will receive through the economic stimulus package. In addition to that, high-income families (those earning $180,000 a year or more) will only see relief in the form of increased loan limits. Families earning less than $180,000 may qualify for a higher Hope Scholarship credit. Low-income families will benefit most, from Pell Grants and the ability to claim the tax credit."
old article, but so far this seems right on pace.
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
