After several years of seeing how escalating tuition rates have been making college out of reach for a large amount students, President Obama and lawmakers have determined that the status-quo shouldn't continue. Obama has set a goal that by 2020, America will have the highest amount of college grads in the world. To meet this goal, the federal government has made adjustments on the financial aid application process and to existing federal financial aid programs. The indicated adjustments are focused on making it easier for low and middle-income students to get federal financial aid to help paying for university. Recent and upcoming changes are described below.
Federal Student Loan Origin
As of July 2010, federal student loans cannot be longer started by private banks. Up until then, colleges could pick whether to have federal loans executed by the federal government itself, or by private banks. Students who currently have federal loans originated by private banks will be able to combine these loans with direct loans to streamline the repayment process. All loans would be serviced by a tiny group of banks chosen by the federal government. This development impacts Stafford loans and PLUS loans.
Free Application for Federal Student Aid (FAFSA) Changes
The Free Application for Federal Student Aid, or FAFSA, is a burdensome process which takes a long time to finish. It is thought that the length of the application process prevents a lot of students from applying for help and discourages many from going to college since they don't know if they would qualify for assistance. Many have proposals for considerable changes in the future, but in the in the interim, some improvements have been rolled out that make steps in the right direction.
Beginning in January 2010, questions that doesn't pertain to certain groups of students are automatically skipped. For instance, low-income students will no longer be required to answer irrelevant asset questions and those who have lived in the same place for five years won't have to answer residency questions. Married students at least 24 years old have 11 fewer inquiries to answer and an additional 22 questions have been eliminated for everyone.
In a pilot project, financial aid applicants in the 2010-2011 school year are can access and fetch tax records from the IRS directly into the FAFSA. This is an discretionary feature that many applicants will have the ability to use and will save time and enhance accuracy. Some other current improvements add immediate estimates about Pell grant and loan eligibility and links to news about graduation rates and tuition rates for universities the student noted on the application
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