Interest Rate Freeze
Annual Consumer Guide to Federal Student Aid Changes
Final California Budget Avoids Most Painful Cuts to Cal Grants, Strengthen College Accountability
Update on "Gainful Employment"
Find What You Need Quickly, with TICAS's New Special Topics Page
Last week, Congress took last-minute action and approved a bill to keep the interest rate for subsidized Stafford loans at 3.4 percent for an additional year. The president then promptly signed the bill into law -- welcome news for students and families worried about paying for college in 2012-13.
For more see our statement on the Senate agreement, which applies to the final agreement as well.
Even though the subsidized Stafford loan interest rate remains unchanged, several other changes to federal student aid went into effect on July 1, 2012.
TICAS released a new consumer guide that explains these important changes, both to Pell Grant eligibility and federal student loans. The guide and companion chart are designed to help students and families make the best decisions about how to finance their education.
- The federal government will no longer pay interest on subsidized Stafford Loans during the six-month grace period. (NOTE: the grace-period subsidy is scheduled to be reinstated for loans issued after July 1, 2014.)
- Graduate and professional students will only be eligible for unsubsidized Stafford loans.
- And, while the maximum Pell Grant award will remain at $5,550, the number of semesters a student is eligible to receive a Pell Grant will decrease from 18 to 12. This limit applies immediately to all students, including those close to completion.
Last week, California Governor Jerry Brown signed the final state budget for 2012-13, which avoided the most harmful Cal Grant proposals and created incentives for all colleges to serve students better. In particular, the Cal Grant performance measures position California as a national leader in college accountability. However, we are disappointed that the Governor chose to use his veto power to make across-the-board cuts to the vast majority of Cal Grant recipients.
A day before the final gainful employment regulations were set to go into effect, a federal judge issued a decision on the for-profit college industry trade association's lawsuit challenging the Department's authority to issue the regulations. The ruling affirmed the Department's authority to regulate career education programs but concluded that the Department did not provide an adequate rationale for its 35% repayment rate threshold and vacated the entire rule as a result.
TICAS regularly conducts research and analysis on a variety of college affordability issues, and we have created a dedicated section on our website to help users quickly find information on many topics, including: cohort default rates, community colleges, net price calculators, Pell Grants, and private student loans.