We would like to take the opportunity to advise you several changes to federal student aid programs that could impact Direct Loan borrowers and Pell Grant recipients. All changes are effective July 1, 2012.
- Undergraduate Direct Subsidized Loan interest rates will increase to 6.8%.
The Direct Subsidized Loan will remain interest-free while enrolled in school at least half-time, however the interest rate will jump from their current level of 3.4%, up to 6.8% effective July 1, 2012.
- Graduate students will no longer be eligible Direct Subsidized Loans
Stafford loans lent to graduate students beginning with the 2012-2013 academic year will no longer be subsidized. While the total annual loan limit that students can borrow will remain unchanged at $20,500, the full amount will be unsubsidized, accruing a 6.8% interest while in school.
- Elimination of origination fee rebate on Stafford Loans and Parent & Grad PLUS loans beginning with the 2012-13 academic year.
This change will result in a 1% origination fee for all for Direct Stafford Loan (subsidized & unsubsidized) borrowers. A 4% origination fee will be assessed for all Parent PLUS and Graduate PLUS Loan borrowers.
- Federal Pell Grant eligibility will now be restricted to a maximum of 12 full-time semesters (600%). This will include all prior semesters of Pell Grant received at all institutions attended. Pell Grant duration for a student is determined by adding together each of the annual percentages of a student’s scheduled award that was actually disbursed to the student. A student enrolled full-time throughout the Fall and Spring semesters would earn 100% of their Pell Grant each year.
In 2010-11 Joe Panther was scheduled to receive a Pell Grant of $5,550, but received $2,775 because he was only enrolled for one semester, will have used 50 percent of that award year’s scheduled award. In 2011-12 Joe Panther enrolled three-quarter time (for both Fall and Spring semesters) and used 75 percent of his scheduled award. Assuming no other enrollment or Pell Grants received Joe Panther’s Pell Grant eligibility used would equal 125%.
Please contact the Office of Student Financial Aid at (319) 273-2700 or firstname.lastname@example.org with any questions regarding Pell Grant eligibility.