The student loan bill signed Wednesday by President Barack Obama as part of the health care bill will give students more help with their student loans.

“It’s wonderful news not only to SU students, but to students across the country,” said Youlonda Copeland-Morgan, the associate vice president for enrollment management and director of scholarships and student aid at Syracuse University.

The Student Aid and Fiscal Responsibility Act, more commonly called the student loan bill, reforms the Pell Grant and Federal Perkins Loan Program.

The act will make sure the amount of money that goes toward Pell Grants increases each year to match the inflation of the cost of living, such as food, books and other things needed at college but not included in tuition, Copeland-Morgan said. It will also allow students to not pay interest to banks.

The act will quadruple the money for Pell Grants, adding $36 billion. It will also add $5 billion of federal money to the $1 billion set aside for Perkins Loans. Copeland-Morgan said it was too early to tell how much additional money SU will receive.

A Pell Grant is given to a student in a low-income family. The cost of the school and whether they are full-time students also factor into whether they are given the grant. A student can receive up to $5,000, which does not need to be paid back.

The act also changes where federal loan money goes. Instead of sending it to banks to be distributed, money will now go directly to students or the universities, according to the law.

Who the Federal Perkins Loans Program will be available to is now more generous, Copeland-Morgan said. A Perkins Loan is given to a student usually from a middle-class or lower-income family. They can receive up to $20,000, which they pay back over time with an interest of 5 percent.

Before the bill was passed, it was heavily negotiated due to the amount of money it called for and what it would cost the government, according to articles in the Chronicle of Higher Education.

Students will begin to see the effects starting next school year, Copeland-Morgan said.

This year, SU is giving about $14.5 million in Pell Grants to about 3,400 students, or about 25.5 percent of the student population. The university is giving $3.2 million in Perkins Loans to about 1,860 students. Some students receive both forms of aid, Copeland-Morgan said.

The number of students on Pell Grants has increased over the past four years, she said. Last year, 21 percent of the student population received Pell Grants, about 500 students fewer than this year.

“I think it reflects the change in the demographics over the years and the divide between the growing number of families that are at the lower end of incomes in the country,” Copeland-Morgan said.

Shannon Mayo, a junior social work major, said she is thankful the bill passed and she is able to receive the loan and grant.

“I know my parents would pay for me 100 percent if they were able to, but some families just aren’t able,” she said.

The Perkins Loan has helped her by offering lower interest rates, which make them easier to pay off. She said the interest rates on the loan she took out freshman year through a bank will cause the total cost of the loan to double if she pays it back a little each year as the bank suggested.

Her friends, who also need loans for school, were affected by the student loan bill as well, she said.

“Even friends that are middle class, if they didn’t receive financial aid (they) would be affected,” she said. “Sometimes just a few thousand dollars is the difference between whether you can go to school or not.”

 

Published on March 28, 2010 at 12:00 pm