Federal loan, Pell Grant limits increase
April 12, 2007
Annual limits for federal Stafford loans and Pell Grants will increase nationwide for full-time, undergraduate students beginning July 1.
The increase in Stafford loan limits is the first one since 1992. They will be increased $875 for freshmen students and $1,000 for sophomore students.
The loans will stay the same for junior and senior students at $5,500.
The current limit per year for dependent freshmen is $2,625 and $3,500 for dependent sophomores. The limits as of July 1 will be $3,500 per year for freshmen and $4,500 for sophomores.
Freshman Justin Vara said he uses student loans to help pay for college and is happy to know he may get more aid.
“I think it’s about time,” Vara said. “College tuition has been increasing over the years and no appropriation has been made until now as far as financial aid goes.”
Junior Jenny Koecher said she pays for her own schooling and has used financial aid.
“I used it my first and second years. I have managed this year not to accept loans,” Koecher said. “I only have one semester left and plan to pay for it without loans.”
While she plans to not take more student loans out, she said it is not fair that the limits only increased for freshmen and sophomores.
“It doesn’t seem right at all. A student is a student, regardless of what year they are in school,” Koecher said. “Fourth- and fifth-year students are most likely in more need of assistance than first- or second-year students because they have been in school for four or five years.”
The limits for Pell Grants will also increase by $260, bringing the maximum award to $4,310. The limit was last raised in 2003.
Financial Aid Officer Anthony Rubis said a little over 20 percent of UW-River Falls students receive a Pell Grant.
These grants are monetary awards given to students based on eligibility after completing a Free Application for Federal Aid (FAFSA).
The increases were part of a bill President George W. Bush signed into law in February, and are rising as tuition nationwide is expected to go up again.
Rubis said Wisconsin tuition will go up as well July 1, however, the amount is still being discussed.
“Most of the time it goes up between two and five percent,” Rubis said. “We may get final numbers in June.”
While Vara and Koecher said they are both pleased to hear financial aid is increasing, they are disappointed to hear tuition will also go up.
“What’s the point then?” Vara said.
Though that question cannot be answered easily, Rubis said it is good the U.S. government is contributing more to student financial aid. However, at the same time, he said he worries for students.
“It’s a good thing from a student’s perspective, however, in the long run it is making them worse off,” he said. “They will end up owing more.”
“A thousand dollars won’t make too much of a difference after college,” Vara said. “[The money] is worth it anytime.”
Federal Student Aid, an office of the U.S. Department of Education, disburses more than $80 billion annually in financial aid to students through schools.