Archive for December 19th, 2011

December 19, 2011

Congress curtails Pell Grants and federal loan grace period

by Grace

The budget finalized by Congress on Saturday curtails some federal student financial aid programs.

The two most important changes: A reduction in the number of years students can receive Pell Grant money and the temporary elimination of a six-month grace period on interest payments on federal student loans.

Pell Grant maximum eligibility period cut from eight to six years

College students taking longer than six years to obtain their undergraduate degree would have their Pell grants cut off next school year under a $1 trillion budget bill passed Friday in the House.

Federal loan grace period

Stafford loan borrowers will still get a six-month reprieve upon graduation from having to pay back their loans, but the principal on the loans will accumulate interest during that period for loans issued between July 1, 2012, and July 1, 2014.

Also will be harder to qualify for automatic zero Expected Financial Contribution (EFC)

It appears that a lower income will be needed to qualify for the automatic zero EFC loophole

The bill also reduces the income level under which a student will automatically be eligible to receive the maximum Pell grants from $30,000 to $23,000. 

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