April 4, 2008

Sen. Kennedy intorduces bill to increase federal financial aid

Posted in Student Loan News at 10:18 AM by Joe From Boston


Yesterday Sen. Kennedy introduced a new bill to increase federal financial aid available to college students.  You can read the press release by clicking here.

Here’s a brief excerpt:

 

  • Reduces low-income families’ reliance on loans by increasing the maximum Pell Grant for the lowest-income Pell grant recipients by up to $750 above the maximum award ($4731 for the 2008-09 school year);

 

  • Reduces the need for students to take out expensive private loans by increasing access to guaranteed low interest Federal student loans. To accomplish this, the bill would increase federal loan limits by $1000 annually for dependent undergraduate students, and by $2000 annually for independent undergraduate students and students whose parents can’t obtain federal parent loans because of poor credit;

 

  • Provides better options for parents who borrow for their children’s college education by allowing repayment of federal parent PLUS loans to be deferred while the student is enrolled in college;

 

  • Eases the ability of colleges to find new lenders for large numbers of students by requiring the Secretary of Education to designate guaranty agencies as “lenders of last resort” on a college-wide basis, rather than on a student-by-student basis, and by clarifying the Secretary’s authority to provide these lenders with capital to make the loans;

 

  • Ensures that existing lenders can continue to make new federal student loans by allowing the Department of Education to serve as a “secondary market of last resort” that would buy Federal Family Education Loan Program (FFELP) loans from lenders that need new capital in order to stay in business and continue their service to students.
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