What Does The New Student Loan Bill Mean For You?
There was a lot of going back and forth by Politicians last fall when the new student loan bill was passed. While the headlines that said ‘student loan bill goes to President‘ sounded good, lurking in this bill is some bad things for new students. Here’s a few things to watch out for when you apply for student aid beginning in the new year.
For beginners, this new bill will increase the maximum Pell Grant limit from $1400 to $6900. Sounds good…right? But wait, this limit is slowly increased over a period of ten years! This bill does nothing to curb the increasing cost of getting and education, that’s one of the main things wrong with it.
More bad news in this bill is that the Government is trying to do away with subsidies and control all the student loan industry. You only have to look at the recent financial and auto bailouts to see what a fiasco this would be. Oh yeah, don’t forget the great Cash for Clunkers program! No do you have a warm and fuzzy feeling about Uncle Sam taking over the student loan program?
Plus, let’s not forget. Should you ever get into a bind and need to file bankruptcy, you can not declare bankruptcy on your Federally guaranteed student loans! Now there’s some student loan advice you won’t hear from Uncle Sam!
Ready for another kicker? This bill will only increase grant support for Pell-eligible students who take rigorous high school courses and major in science, technology, engineering, math and critical foreign languages. Who decides which foreign languages are ‘critical’? What if you want to study outside of these areas? Sorry, no Pell Grant for you!
One area where some parents hold out hope in the bill is the clause that will allow parents to defer payment until their Children are out of College. Personally I don’t see this as a good idea. Deferring debt for 4 or more years isn’t a good idea. What if the kid stays in school for 13 years (as one of my Kids public school teachers was)? A lot of things can happen in that amount of time. If there is a huge default of these type of loans, guess who’s going to get to pay?
