July 1, 2009

July 1, 2009 – Big Changes Take Effect Today

Posted in Graduate Students, Legislation Affecting Students, Parent PLUS Loans, Saving for College, Stafford Loans, Student Loan News, The Financial Aid Process at 1:13 PM by Joe From Boston


Welcome to the next fiscal year, and along with it come some great changes for borrowers.

  • The maximum Pell Grant amount  increases to $5,350 for the 2009-10 school year, a 13% increase from last year.
  • The fees to originate a new loan fall by half of a percentage point. Next year, it will fall by that much again. The changes will free more money for those students to use for tuition.
  • “IBR” plans come into effect – income based repayment.  Borrowers may be eligible to reduce their monthly payments based on their income.   Also, teachers or those working in other forms of public service can reduce their payments based on their public service salary.
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3 Comments »

  1. Iris said,

    Linda, do not let your daughter borrow from Sallie Mae. From my prvious notation, I co-signed for my granddaughter for a $3000.00 loan in 2005. This was her last semester and she needed some help. At the time I signed, I was receiving soc sec but since it was such a small amount I had no problem. In Aug 2005 I lost most of my belongs and home in the Katrina flood. I have been struggling ever since. My granddaughter had to move also and is having a hard time making the payments. I called them and explained my position and gave them my cell phone # beacuse I had noyhing to hide. Big mistake. I receive calls from them every day including weekends and holidays. My credit report has been severly ruined. they send a report each month. I am 76 years old and the stress is overwhelming.Community College is good advice also.

  2. linda jansson said,

    My daughter wants to transfer to SUNY Cortland in NY. She has worked very hard to get a 3.419gpa along with 2 p/t jobs, babysitting regularly for an autistic boy and dealing with ADD. She has come along way and values her education and wants to get her Batchelors and go on to her Masters degree.
    We truly want to send her, but don’t seem to qualify for anything. We are an average family, never lived beyond our means and are just staying afloat at this time. My husband is 57 years old, works in a factory and does all the overtime that is offered, which pays the bills but he is exhausted. I lost my job and have been unemployed for over a year. My husbands job is on the line as his companys contract is up in Oct and the company does not want to renew it as they don’t want to deal with the Union anymore. So, we are pretty sure he will be losing his job. If we sign for a loan, what will happen if he loses his job and we can not pay? Also, we have our son’s student loan in our name to. Please help and/or advise.
    Thank you
    Linda Jansson [edited to remove personal information]

    • Linda,

      First, have your daughter apply for every scholarship she can find. Look for free scholarship listings, like http://www.StudentScholarshipSearch.com/. Scholarships don’t have to be paid back.

      Next, was she awarded any Stafford loans? Stafford loans are in the students name and don’t have to be paid back until after graduation.

      Lastly, lets talk about worst case scenario – you have loans for your daughter and you’re both out of work. If this happens there are 2 things to do. First, call your lenders and ask for an economic hardship deferment. The lender will put your payments on hold for a period of time while you get back on your feet. These are limited in time, varying by circumstance.

      Now, a word of caution. Deferments are regulated by law for federal loans, like the Parent PLUS Loan, but they’re much murkier for private loans. So, if you’re already worried about what may happen, stay away from private loans.

      Lastly, have you discussed with your daughter about going to a less expensive school? A lot of families are having to take this option due to finances. She could attend a local community college for a year then transfer to SUNY Cortland next year when your finances have stabilized a bit. This isn’t an option people want to hear about, but not everyone is lucky enough to have a choice these days.

      I wish you all the best of luck!


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