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Does the inevitability of rising college costs make you cringe? If you answered yes, you’re not alone. While the bad news about tuition hikes in the upcoming academic year is daunting to many students, to say the least, you can rest assured that there are also some positive changes around the corner to cushion the blow.
According to a January 12, 2010 article published in U.S. News & World Report by Kim Clark, “8 Happy—and 3 Scary—Trends in Financial Aid in 2010,” good news is on the horizon for students that need assistance with college expenses. Stimulus monies afforded by the Obama Administration make it easier for more individuals to fund their education.
Pell Grants Will Increase by $200. This is good news for students who rely heavily on the Pell Grant to cover college expenses. For the 2010-11 academic year, Pell Grants will increase by $200 to $5,500, according to plans announced by the Obama Administration. After that point, it will increase in accordance with the consumer price index plus 1%.
It Will Be Easier to Get a Student Loan. Financial experts often call student loans “good debt” because the return on investment is excellent due to low interest rates. Here’s the good news: The interest rate for Stafford Loans is lowering to 4.5 percent from 5.6 percent. It will also be easier to repay student loans once you graduate since payments are capped at 20% of your monthly discretionary income for the income contingent payment plan, a change that took effect July 1, 2009.
There Will Be More Work Study Jobs
Since many states place caps on student loans, there will be a lot more work study options available to cover the costs of college. In fact, approximately 200,000 more jobs will be created in the upcoming academic year to help students supplement their existing financial aid packages.
What’s Next?
While stimulus monies are adding more opportunities for college funding, colleges across the United States have also felt the pinch in-house. For instance, scholarship funding has been hit hard in many colleges; therefore, fewer students are receiving scholarships across the board. Even more colleges anticipate a reduction in future scholarships available for students in the coming year.
Other colleges are reaching across state lines to encourage out-of-state students to attend their schools by reducing their rates or offering scholarships. Some colleges offer discounts to children of alumni to offset out-of-state rates. For instance, Marshall University in Huntington, WV offers the Alumni Legacy Scholarship to children and grandchildren of alumni who live out of state and meet scholarship requirements. First-time freshmen may receive up to $7,500 to offset costs associated with non-resident fees.
The 2010-11 academic year will bring its share of financial challenges for college students. Although competition for scholarships will be tight, more students will be able to take advantage of federal grant, loan, and work study programs to fund their education.
