Along with the healthcare plan, the recent bill signed by President Obama includes changes in financial aid such as easier FASFA forms, increased Pell grants and tax credits. Also, community colleges will now have their programs examined to ensure they are providing programs that match the needs of the private sector and making sure students are well qualified for those jobs.
One important aspect of the recent bill is that all students must complete a new Direct Lending Master Promissory Note for the upcoming school year, even if you have filled out one before, according to Camille Nicolai, Interim Director, Department of Student Financial and Employment Services.
Students can do this by going to studentloans.gov.
Secretary of Education Arne Duncan said in a phone conference that because many students had difficulty with the FASFA form, which is the federal financial aid form, the government made changes to the form, making it simpler to use.
Nicolai said that when she filled out the FASFA, it took her five minutes. She added that she saw this recently when they helped new students fill out their FASFA and “there were less questions.”
The White House estimates Pell grants to increase from $5,550 to $5,975 from 2013 through 2017, according to a press release.
“You can literately go to (community colleges) for free,” Duncan said in the phone conference.
On August 9, President Obama gave a speech in Austin, TX about the changes in financial aid. He said, “We’re tripling how much we’re investing in the largest college tax credit for our middle-class families. . that tax credit is now worth $2,500 a year for two years of college. And we want to make it permanent so it’s worth $10,000 over four years of college — $10,000.”
“Once students graduate, new loan repayments won’t go above 10% of their income,” Duncan said. He added, “After 10 years of public service work all of your debt will be forgiven.”
Those who don’t work in public service will have their loans forgiven after 20 years.
Of course, you must keep current with your loan payments to qualify.
The White House is providing $2 billion to help community colleges and other institutions to “develop, improve and provide education and career training programs suitable for workers,” according to the press release.
Next fall there are plans to have a Community College Summit at the White House to talk about the relationship between community colleges and the job market.
The White House has made this money available by “ending government subsidies currently given to financial institutions that make guaranteed federal student loans,” according to the press release.
“Starting July 1, all new federal student loans will be direct loans delivered and collected by private companies under performance contracts with the Department of Education.”
The White House estimates that this will free up nearly $68 billion, and allow Wisconsin to receive “more than $444 million by academic year 2020-2021.”
According to Nicolai, the Direct Lending part of this program has been around for 17 years as some colleges were already part of that program. The only real difference now is that it’s being mandated.
Nicolai said that to help prepare for the new program, MATC “will pilot the Direct Lending program this summer for first-time loan borrowers.”
The hope is that with such small numbers, only about 100 new loans, the financial aid office will have worked out any potential glitches in the new program.
If students have any further questions concerning Direct Lending, they can contact Camille Nicolai at 414-297-8875 or by e-mail at [email protected].
