Things are changing. First, we are headed for the fiscal cliff at the end of this year, and The Higher Education Act, which affects federal financial aid, is up for re-authorization in the fall of 2013. The Wall Street Journal points to some possible reductions in student aid as a result.
- If the automatic spending cuts kick in because Congress can not agree to a budget by the end of the year, federal financial aid to college students will be reduced by 8%.
- Pell Grant scale backs enacted in 2012 through March, 2013, could become permanent.
- The $2,5o0 tax credit for families for up to four years could be reduced to $1,900 for only up to two years.
- The 3.4% fix interest rate on subsidized Stanford Loans may not be extended after the June, 2013, deadline.
It’s good to have this head’s up in order to plan to look carefully at future college costs and not expect federal financial aid to make up what you can not afford.