The debt-ceiling compromise was signed into law this week, which means that more than $17 billion in federal Pell Grants will still be available to eligible students through at least 2013. So Tuesday’s deal is great news for the approximately 309,000 students who attend Virginia colleges using Pell Grant aid.
However, the legislation cut two aid programs that helped student borrowers. First, graduate students with federal loans will lose their interest subsidy, meaning they will begin accruing interest on their loans immediately, instead of after they graduate. Second, students will no longer receive on-time repayment incentives for federal loans, including the Stafford.
Does this mean that students should no longer count on federal student loans to help cover their college costs? Not at all. It just means that students and their families should carefully read the fine print and understand how and when federal loans need to be repaid.
If you have questions about how the August 2 legislation will affect your federal financial aid, contact your institution’s Financial Aid Office.