Paying for college has always been difficult, but recent changes and uncertainties have left Georgia students, parents and administrators wondering which end is up.
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Student aid changes
Georgia college students and families have seen a multitude of changes in recent years to three key programs: the federal Stafford Loans and Pell Grants and the state’s own HOPE Scholarship. Here are some of the changes:
Interest rates on the subsidized Stafford Loan doubled July 1 from 3.4 percent to 6.8 percent because of Congressional impasse. Subsidized loans go to those with financial need. A Senate compromise, which could be voted on this week, ties the loans to the U.S. Treasury 10-year borrowing rate. This fall undergraduates would borrow at 3.85 percent interest rates. Their rates would never exceed 8.25 percent. The House bill also links interest rates to the Treasury note. Differences between the two are expected to be resolved before students return to campus. The new terms are expected to affect loans originated after July 1.
This federal program is for low-income students. Unlike loans, this money doesn’t have to be repaid. Recent changes include reducing the eligibility time from 18 semesters to 12 and tightening family income requirements to reduce the number of students who receive the maximum award amount. Students used to be able to receive two grants in one year to help pay for summer classes, but that option is no longer available.
This state program is supported by the Georgia Lottery and lawmakers overhauled it in 2011 to prevent it from going broke. The award used to cover all tuition but no longer does for the vast majority of recipients. The award is tied to lottery revenue, not tuition, so the amount will vary each year. As tuition costs go up, HOPE is expected to gradually cover a smaller percentage of this expense. HOPE recipients must earn and maintain a 3.0 grade-point average.