July 1st, 2012 marked a big change in student lending. While the federal government extended the low rate for Subsidized Stafford loans (which will stay at 3.4% for at least one more year), there are other changes:
Elimination of Grace Period Interest Subsidy
For Subsidized Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014, students will be responsible for the interest that accrues on the loan during the grace period. If a student does not pay the interest accrued, the interest will be capitalized to the principal amount of their loan when the grace period ends.
Eligibility of Students Without a High School Diploma
After July 1, 2012, students must have either a high school diploma or a recognized equivalent (such as a General Educational Development certificate [GED]) or have been homeschooled to be eligible for federal student aid. Students will no longer have the option of becoming eligible for federal student aid by passing an approved test or completing at least six credit hours or 225 clock hours of postsecondary education.
Elimination of Subsidized Stafford Loans for graduate students
Starting July 1, 2012, graduate students will no longer be eligible for the Subsidized Stafford Loan funds. This will raise the Unsubsidized Stafford Loan limit from $12,000 annually to $20,500.
Remember to always get federal loans first and only use private student loans as a final option to close the gap left in your tuition bill. As always, SimpleTuition recommends that you start your research early this year to ensure you have the funds you need to start your semester.
Stafford Loan Topics