LARGER PELL GRANTS
LOWER LOAN INTEREST

Officially, the 'Re-Authorization of the Higher Education Act' is the process by which Congress make changes to federal financial aid programs for college. In May 1998, the House passed their version and in July 1998, the Senate followed with a similar version. While final language and Presidential approval are still pending, some changes to college financial aid are certain. Below are some of the key revisons.

• For many years, Federal Pell Grants have had a maximum in the $2,400-3,000 range. This maximum will be raised to $4,500 range, beginning Fall 1999.
• Dependent students (under the age of 24) will be allowed to protect up to $2,200 of income per year. Fifty percent of any monies earned in excess of the $2,200 will be considered available for college costs. Independent students (over age of 24) will be allowed to protect up to $5,000 in income.
• Federal student loan interest rates will be lowered from levels currently in the 8% range to rates in the 6% range.

Other changes to the financial aid process are projected to be minimal. The Free Application for Federal Student Aid (FAFSA) form, required in order for students to be considered for federal and state aid based on need, is not expected to see any dramatic changes. With Americans borrowing over $30 billion each year in Federal student loans, the biggest impact of 1998 Re-Authorization will be after graduation from college. This is when lower interest on loans will provide a much needed reduction in the amount borrowers will repay.