A bigger budget, better student loan interest rates and more stimulus dollars will help change schools for the better, Education Secretary Arne Duncan said at a press conference yesterday.
Congress gave the U.S. Education Department $2.4 billion extra in its fiscal year 2009 budget, which Duncan will dole out to schools that serve children with disabilities and students from poor families, as well as some other K-12 programs.
College students will get some breaks as well. Instead of applying for a maximum Pell Grant of $4,731, they could be eligible for $5,350, an increase of about 13 percent, for the 2009-10 school year.
Starting today, college students who take out new loans will pay half a percentage point less in fees to originate a loan, and that number will drop again next year. For those who have a federal student loan, they will now be able to make monthly payments based on their income if they accumulated high loan debt compared to their earnings.
They would have to pay less each month if they entered the program, but they would also have to pay more interest because they're taking longer to pay off their debt. If the borrowers work in public service, they may not have to pay off their loans after 10 years.
These financial aid changes come as the department is also revamping the FAFSA form.
On an economic stimulus note, states have to apply for funds to stabilize their budgets by today. Thirty-five states plus the District of Columbia and Puerto Rico have scored about $25 billion so far. While 49 states, territories and districts have applied for the funding, Montana, Vermont and Texas still haven't turned in their applications.
