With President Obama going to stay in the White House for another four years, students and families may have no other choice but to pay for more expensive education. Changes to college financial aid may be felt starting next year and while every student hopes these changes would be beneficial for them, well, majority of them are not.
Current federal loan comes with 3.4 percent interest, which is acceptable. However, starting July 1st in 2013, the interest rate would jump to 6.8 percent, which literally doubles the current low rate. The increase may seem inevitable next year considering it would cost $6 for the government to extend the lower rate for another year.
Perhaps, even the president couldn’t stop it knowing the Congress only passed the extension because both Obama and Romney supported the 3.4 percent interest rate before the election.
President Obama, requested for a small increase to the maximum Pell grant award from $5,500 to $5,630 for the 2013-2014 school year. The grant remained steady for the last couple of years and while the increase was a small one, it was notably helpful for students pay their education. However, Pell grant award may face funding shortfall after fiscal year 2013.
The president formally requested for the American Opportunity Tax Credit, which pays families $2,500 back to help them fund education of their children. However, there is a possibility that it will not be implemented in 2013-2014 fiscal year. This is why the president’s intervention is needed to keep this tax credit on the roll.
This school year 2013-2014 will set transparency on college costs higher as the Obama administration has been pushing this idea and it was successful.
“One effort that already debuted is the Financial Aid Shopping Sheet, a comparable list of costs, aid, and outcomes that hundreds of colleges have already pledged to send to admitted students starting in the 2013-2014 school year,” a US News report said.
College education costs may keep on rising each year, however, if the president could feel how difficult it is for students to pay for their education and would improvise ways to make things a little lighter, many American students may just make it to finishing their course and hopefully, pay their debts.
[source: US News]