Keeping Abreast of, and Saving, (Your) Financial Aid

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Though an American default was averted, the effects of the political brawl over the debt ceiling which played out before the semester began are continuing to be felt. The deal that was finally reached included a resolution for a special bipartisan committee to find $1.2 trillion in spending cuts that would be implemented over ten years.
So what do we care?
In college student terms, this situation threatens the full spectrum of federal financial aid.
Most USF students who fill out a Federal Application for Financial Aid or FAFSA, (and we are many) end up recipients of three principal forms of aid: Pell grants, Stafford loans, and Perkins loans.
On the chopping block now are the scale and even existence of these programs. Lawmakers on the committee are scambling to find sources to cut from to prevent another showdown over the debt ceiling in the very near future.
And some cuts have already been made, like the August elimination of subsidized Stafford loans for graduate students. And efforts to reduce the annual limit of federal Pell grants from $5,500 to $4,750, and possibly even further to $3,500, are being seriously debated as we write.
Our position on this issue is predictable: preserve federal college funding as much as possible This is especially necessary as state aid programs are being cut or are running dry. The National Bureau of Economic Research shows that federal funding, especially grants, increase the likelihood of students finishing college, which surprisingly enough, even our economic climate, pays for itself over time.
But our other position is two-pronged. If these venerable national institutions of higher education are to be prevented from being siphoned to oblivion, they require that we students be educated about what federal aid makes available to us, and that we pressure our lawmakers clearly, loudly, and without delay (the congressional slashing committee must present their debt-reduction plan on November 23rd.)
For you benefit, here’s the federal aid scheme in a nutshell. Pell grants are federal monies given to students based on demonstrated need. The maximum grant one can receive per academic year is currently $5,500.
A Perkins loan is college money backed by the U.S. government; it has a 5% interest rate and is repaid several months after gradation and is need-based. Undergraduates have a yearly maximum of $5,500.
Stafford loans, which, unlike Perkins, is government money, come in two varieties: unsubsidized and subsidized. Students who can demonstrate need won’t have the 6.8% interest accumulating on a subsidized loan while they are in school. Unsubsidized loans are given for those who can’t show need, and have interest accrue on their loans as they attend school; both are repaid months after graduation.
On October 24, Provost Jennifer Turpin forwarded an online petition via e-mail to the university community telling Congress spare student aid from deep cuts. The petition can be found at studentaidalliance.org. We urge all readers to sign this petition and to also contact their congressman and senator to reinforce this message. We’re not advocating this just for our own benefit; many future cohorts of college students will need this too.

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