San Diego, CA – December 20, 2007 – January 1st is an important date for college students and their parents: it marks the beginning of the 2008-2009 financial aid season and means they should get moving with their financial aid applications. With college enrollment at a record high and tuition prices continuing to rise at double the rate of inflation, it is critical for students and families to apply as early as possible to secure the best college financial aid package. To begin the financial aid process, families must complete the Free Application for Federal Student Aid (FAFSA).
"All students and families seeking financial aid for next year should be marking January 1 on their calendars as the date they can apply for aid," said Joanna Acocella, executive vice president for College Loan Corporation. "Submitting the FAFSA as early as possible provides the best opportunity to secure much-needed federal financial aid."
Submitting the FAFSA is the first step in the financial aid process and helps the U.S. Department of Education determine the types of financial aid that families are eligible for, including government grants, scholarships, work-study programs and student loans. Families are advised to apply soon because, after financial or other qualifications are met, institutional aid is usually awarded on a first-come, first-served basis.
Congress has also made changes to federal financial aid this year with the passage of the College Cost Reduction and Access Act of 2007. The changes include:
Pell Grants: The new legislation increases funding for the Federal Pell Grant Program by $11.4 billion over the next five years, raising the maximum annual award to $5,400 by 2012. This year, the maximum Pell grant available to qualifying students is $4,800. Pell grants benefit over 5 million low-income students annually.
Stafford Loan Interest Rates: As part of the new legislation, interest rates on all Subsidized Stafford Loans will be cut in half over the next five years. The interest rate carried by all Stafford Loans disbursed after July 1, 2008 will be 5.44%, down from 6.8% in 2007. Additionally, the legislation ensures that students will not have to pay more than 15% of their discretionary income during loan repayment.
How to Apply: Applying for financial aid begins with the submission of the FAFSA. The FAFSA is available at www.fafsa.ed.gov in electronic form and in paper form from local libraries, high school guidance and college financial aid offices. College Loan Corporation recommends the electronic form to students and families who have access to the internet and are comfortable using an electronic means of submission.
The electronic FAFSA has built-in checks to ensure accuracy and is processed quicker than paper submissions. (Applicants submitting the FAFSA electronically must obtain a pin number from the U.S. Department of Education, www.pin.ed.gov.)
College-Specific Requirements: Students should also contact the colleges to which they have applied to ensure that they complete any required college-specific financial aid forms. Students planning to apply to a private college should also fill out the College Board’s CSS/Financial Aid Profile application. This form is used by many private colleges and universities to determine eligibility for non-government aid, such as grants awarded by individual schools. For more information, go to: profileonline.collegeboard.com.
Financial Aid Awards: Several weeks after submitting a FAFSA to the U.S. Department of Education, applicants will receive a Student Aid Report (SAR). This letter will explain their Expected Family Contribution, help them determine eligibility for student loans and explain the need-based and other aid for which they qualify. It is important to check the accuracy of the SAR, as colleges will also use it to determine a family’s specific aid package. Need-based aid is calculated according to financial criteria, while other types of aid, like student loans, are available to almost all applicants.
CLC provides a full suite of financial resources to college-bound students and their families, including federally-guaranteed Stafford, PLUS, Grad PLUS and Consolidation Loans, private education loans, financial literacy materials at www.collegeloan.com, and dedicated, expert loan consultants available 24/7 at 1.800.2COLLEGESM.
College Loan Corporation (CLC), headquartered in San Diego, is a top 10 student loan provider, managing more than $10 billion in student loan assets. By offering innovative loan products and industry-leading customer service, the Company has helped make higher education possible for more than 800,000 students and families. CLC is the proud winner of the 2006 Torch Award for Marketplace Ethics, awarded by the Better Business Bureau of San Diego County. More than 900 colleges and universities have designated College Loan Corporation as a suggested lender. CLC’s student loan hotline offers expert loan consultants 24 hours a day, 7 days a week at 1.800.2COLLEGESM. For more information, visit collegeloan.com.