What you need to know about financial aid changes for 2010-11
Several dramatic changes were made to student lending as part of the health care reform bill passed earlier this year. Here are the highlights of those changes:
- College financial aid offices no longer direct families to their chosen banks to fund loans. Now, all new federal student loans will be disbursed directly from the government, through the colleges. College financial aid offices will provide students with access to the Direct Loan Master Promissory Note, which must be signed by students and/or parents.
- Students still have to file the Free Application for Federal Student Aid (FAFSA) to be eligible to access federal financial aid. This application is available online at www.fafsa.ed.gov. While in the past families have cited the difficulty of the FAFSA application as a major barrier to applying for financial aid, the complexity has been reduced this year. The most recent electronic version of the FAFSA has eliminated several redundant questions. And in some cases, the FAFSA is allowing those who've filed their taxes to click a button and have their relevant tax information automatically entered into their FAFSA — saving a lot of time and energy.
- Rates on subsidized Direct/Stafford loans (which do not accrue interest while the student is in school) fell to 4.5 percent from 5.6 percent for loans issued starting July 1, 2010. (Those rates will be adjusted annually.) For 2011-12, those rates drop to 3.4 percent.
- Rates on unsubsidized Direct/Stafford loans remain fixed at 6.8 percent for all borrowers.
- Rates for parental Direct PLUS loans are 7.9 percent, less than the 8.5 percent charged on the old FFEL (Federal Family Education Loan) PLUS lending program.
- Origination fees on Direct Stafford loans dropped from 1.5 percent to 1 percent, making more of the loan amount available to pay college costs. (For 2011-12, this fee will be eliminated.)
- While many things have changed, one thing remains the same: New Hampshire students and parents will have the Center for College Planning to rely upon for free assistance filing the financial aid forms and understanding the financial aid process. When the time comes to file your FAFSA, don’t hesitate to contact CCP toll-free at 1-888-7-GRADUATE, ext. 119, or email@example.com.