Additional Financial Aid Information

Annual educational loan financing market - $85 billion

Total loan holdings in the FFELP private lender market - $325 billion

Sallie Mae – Largest private (non federal government) student lender
 - $164 billion student loan portfolio
 - Sallie Mae lost $100 million in first quarter 2008

College Cost Reduction and Access Act of 2007 (CCRAA) - Reduces subsidies to banks and lending institutions in the government insured student loan market.  
            - Will put $20 billion into the Pell Grant Program for low income students which would have gone to lender subsidies,.  

- 95% of Pell Grant recipients have family incomes below $50,000 per year.  
            - At least 57 private lenders have withdrawn from the student loan market including, NelNet, Zion, Student Loan Xpress, College Loan Corporation.
            - Lenders withdrawing represent 10% of Stafford and Plus loan volume and 30% of consolidation loans.

3 types of loans

1. Direct Loans – Federal Government gives money to colleges to award to FAFSA eligible students.  The federal government is the official lender.

2. FFEL – Federal Family Education Loan – Federal government subsidizes loans made to students by private lenders.  (also PLUS loans for parents)

3. Private loans where lenders work directly with borrowers.  These are often consolidation loans.

Subsidized Stafford Loan Limits – Undergraduates
- $3,500 if you're a first-year student enrolled in a program of study that is at least a full academic year.

- $4,500 if you've completed your first year of study and the remainder of your program is at least a full academic year.

- $5,500 if you've completed two years of study and the remainder of your program is at least a full academic year.

New Interest Rates – Subsidized Stafford

First disbursement of a loan:		Interest rate on the unpaid balance
Made on or after	And made before
July 1, 2008	July 1, 2009	6.0 percent
July 1, 2009	July 1, 2010	5.6 percent
July 1, 2010	July 1, 2011	4.5 percent
July 1, 2011	July 1, 2012	3.4 percent
Unsubsidized		6.8 percent

Consolidation loans

- Most Stafford, Perkins, Plus Direct, or FFEL loans may be consolidated during grace period following graduation or withdrawal.

- Consolidation may be either with the Federal Government or a private lender.

- Rates are fixed and repayment may be extended to as long as 30 years.

Forgiveness and repayment provisions of 2007 CCRAA

            - Public Service occupations – loan may be forgiven after 10 years of service
                        (emergency management, military service, public safety, law
                             enforcement, public health, public education, social work, etc.)

             - All loans forgiven after 25 years of repayment

 - Income Based Repayment - (IBR) which will go into effect on July 1, 2009 is
                 a new payment option for federal student loans. Starting July 2009, it will
                 help borrowers keep their loan payments affordable with payment caps
                 based on their income and family size  (15% of discretionary income,
                 where discretionary income is defined as adjusted gross income minus
                 150% of the poverty level for the borrower s family size).  For most eligible
                 borrowers, IBR loan payments will be less than 10 percent of their income
                 and even lower for borrowers with low earnings.  IBR will also forgive
                 remaining debt, if any, after 25 years of qualifying payments.   All Stafford,
                 Perkins, FFEL, Direct, Fed Direct Consolidated are eligible for IBR.   Parent
                 Plus loans are not eligible.    (www.ibrinfo.org)

Pell Grant – Based on financial need.  Most Pell Grants awarded to students from families with incomes below $50,000.

Pell Grant Award Limits

- $4731 (2008 – 2009)

- $5000 (2010 – 2011)

- $5400 (2011-2012)

In 2006 - $13 billion in Pell grants for 5.1 million recipients

Federal Income Tax Benefits for College Expenses 

- Hope Tax Credit – Up to $1,650 per year tax credit for tuition and qualified college
  costs.  AGI maximum $57,000 or $114,000 if filing jointly.

- Lifetime Learning – Up to $2,000 per year tax credit for tuition and qualified
  college costs.  AGI maximum $57,000 or $114,000 if filing jointly.

- Student Loan Interest Deduction – Up to $2,500 tax deduction on interest paid on
  student loan.  AGI maximum $65,000 or $135,000 if filing jointly.

- Tuition & Fee Deduction – Up to $4,000 deduction for tuition and fees if ineligible
  for Hope of Lifetime Learning tax credits.

- 529 College  Savings Plans – Savings account for college costs.  No federal tax on
  withdrawals made for qualified college expenses.   No income limits. 

Financial Aid Information Links

Federal Student Aid On The Web – www.studentaid.ed.gov

FinAid - www.finaid.org

EdFund – www.edfund.org

Project on Student Debt – www.projectstudentdebt.org