Pace Paw Print

Media Credit: aafp.org

The cost of college continually goes up every year and most of us are wondering when it will end. However, Bush just signed a new bill that will make the expense of college a little easier for poor and middle-class students.

The new bill allows Bush to say that between him and Congress, they have eased the burden of college costs for students which is always a major political topic. According to ContraCostaTimes.com, he said that making college more affordable has always been a priority on his list.

The House of Representatives approved the law 292 to 97; the Senate vote was 79 to 12. "This bill will help ensure that no qualified student is prevented from going to college because of the cost." said Rep. George Miller to the Washington Post.

The new student loan law will provide about $20 billion for financial assistance for college students.

The bill states that legislation will boost the maximum Pell grant from $4,310 a year to $5,400 a year by 2012. A Pell Grants is a federal loan that goes to low-income and certain post baccalaureate students.

It is based on the students expected income, the expected cost of the school they are attending, if they will be full time or part time, and if they will be enrolled for a full year. The government determines this by the student's FAFSA form.

The bill will also cut the interest rate in half on federally backed loans which is a huge help for many people. The rate will go from 6.8 to 3.4 percent over the next four years. Federally backed loans include Stafford Loans, Perkins Loans, PLUS Loans, and Federal Family Education Loans. Every loan except a PLUS loan goes to the students as a supplement to grants, scholarships and their own resources to pay for college.

The limit effective for loans disbursed is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergrads, and $5,500 per year for junior and senior undergraduate students. There is a grace period of six months after graduation, and then the student must begin making payments.

These loans can either be subsidized or unsubsidized. A subsidized loan means that the government will pay off the interest while the student is in college. An unsubsidized loan means that the interest accrued will be added on to the actual amount. For example, if a student had a $10,000 loan that is unsubsidized, they will have to pay the $10,000, plus whatever interest they accumulated, back to the government.

A PLUS loan (Parent Loan for Undergraduate Students), is a loan that parents can take out to cover any costs they need to. They can borrow a lot more money this way, but there is no grace period. Payments start immediately and it is up to the parent to pay back the loan. There are no cosigns to a PLUS loan. Also, parents should know that the interest rate on these loans was increased significantly by legislation to 8.5% which started on July 1, 2006.

The new bill has also states that annual payments for students will be capped at a percentage of their income to prevent people in low paying jobs from having to pay back more than they can afford. Student borrowers with new and existing loans will be eligible to enter into income based repayment starting July 1, 2009.

Undergraduate and graduate students who commit to teaching in public schools can receive tuition assistance of $4,000 each year, starting in the 2008-2009 school year.

Public service workers, such as nurses or firefighters, will receive loan forgiveness after 10 years of service and loan payments..

All of these things will significantly help students to pay for college. Many people have turned down schools such as Harvard, Yale and Boston College because the costs are too high. If a student has worked hard and has been accepted to the schools he or she applied to, this bill will now help to make the college cost a little lighter.

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