MONTGOMERY, AL (WSFA) -
The good news: loan rates will remain at 3.4% for another year, rather than jumping to 6.8 %.
The change should help more than 7 million students like Auburn University Montgomery Senior Cheryl Love save an average of $1,000 on each on their loans.
“It’s going to help a lot of students continue their education,” Love said.
Effective July 1, prospective or current graduate students will no longer receive subsidized Stafford loans: those interest free ones while you are in school.
Phones have been ringing off the hook at AUM’s Financial Aid Office with students trying to determine how this will affect their wallet.
Now only unsubsidized loans will be available for grad students at a 6.8% interest rate that will kick in as soon as the loan is disbursed. The amount of the loan will not change.
Other changes include lowered income limit for the expected family contribution number on your FAFSA, which will cut funding from many lower income students. And no more repayment incentives.
AUM’s Financial Aid Director Anthony Richey says 75% of AUM students get these loans.
“It is going to be a little tougher. The interest is going to be a little higher, the total amount of the loan is going to be a little higher when they get out,” Richey said.
Other changes include the elimination of interest subsidy for grace periods and decreased eligibility for the Pell Grant Program.
“I think a lot will be disappointed to see that their Pell grant will be limited,” AUM Junior Shelisia Carpenter said.
Carpenter says these new changes are discouraging, especially for students like her who work part-time and are trying to make ends meet.
“Trying to make a living and trying to afford college is tough,” Carpenter said.
These changes will not affect past loans in any way. The new changes are for any loans disbursed after July 1. These changes will affect many students in the Fall.
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