By Chris Kieffer/NEMS Daily Journal
The new health care legislation bill includes measures that change how college students get financial aid, with loans coming directly from the government instead of through banks and other private lenders. Daily Journal education reporter Chris Kieffer asked University of Mississippi Financial Aid Director Laura Diven-Brown about how the bill would affect college students in Mississippi.
Q: What are the highlights of how student financial aid will be changed by the new health care bill?
A:The measure ends originations of Federal Family Education Loan Program loans effective June 30 and allocates $61 billion in savings that government accounting rules project over the next 10 years to other student aid and higher education initiatives.
It provides a $36 billion increase in Pell Grant funding over the next 10 years. The bill also provides $2.55 billion in funding for historically black colleges and universities and other minority-serving post-secondary institutions, in part to promote graduates in the fields of science, math, engineering and technology.
Another $750 million is allocated to increase College Access Challenge grants to the states during the next five years.
The measure provides $2 billion in grants to community colleges over the next four years for career training programs as part of a U.S. Department of Labor program.
Absent from the reconciliation legislation due to cost constraints were several provisions of the original legislation, including a revamping of the Perkins loan program and a proposal to preserve lower interest rates on subsidized Stafford loans to undergraduates. As a result, these interest rates will revert to 6.8 percent, effective July 1, 2012.
Q:What do you expect to see in terms of the amount of financial aid available? Will there be more or less? Will it be easier or harder to receive?
A:At Ole Miss, the expectation is that there will be more financial aid available because Pell will increase. The direct loan program conversion is a processing change that will not impact the amount of loan money available. At this time, how easy it will be for students and parents to process through direct loans as compared to Federal Family Education Loan Program at our school is unknown, but we have been preparing for the conversion since mid-fall, so hopefully things will go smoothly.
Q:How does this change the procedure of students applying for financial aid?
A: The application process will be basically the same. For federal aid, students and parents must still complete the FAFSA (Free Application for Federal Student Aid). In regards to the direct loan conversion, the federal requirements are similar as compared to FFELP – entrance counseling, signing of a master promissory note – but these will be handled by the federal processor instead.