A Stafford Loan reminder

For any student who borrows money from the Federal Subsidized Stafford Loan Program, the interest rate for this loan will be changing for loans that are to be used for any period of enrollment beginning July 1, 2009 or after. For the 2009-2010 academic year, the subsidized Stafford Loan rate will be 5.6%, which is a .4% decrease from loans borrowed for the 2008-2009 year. However, if the student borrows funds through the Unsubsidized Stafford Loan Program, the rate is fixed at 6.8%. This is the type of loan that is accruing interest while the student is enrolled in school, so 6.8% is a definite "ouch".

With October 15,2009 as a deadline for the House and Senate to pass student aid legislation, a mere 4 months away, the life and times of certain financial aid programs may be changed forever. In the next 6 months to a year we might see the largest changes to the federal student aid programs in many many years. Student loans are a primary area of discussion in the Obama administration's proposals. Time will tell whether his proposals can actually change the ways that students and families finance higher education.

I have recently agreed to co-chair the government relations committee for our state organization, NYSFAAA, with a well respected colleague. As new legislation comes about on both the state and federal level, I hope to keep you, my readers, well informed.