ever before.
Since Congress voted to fatten its financial aid coffers in May and fast-tracked the changes, every campus financial aid office in the country has been scrambling to get the word out.
In his 38 years in the business, Hanson said he's never seen anything like this.
“Between the increases in the Pell Grants and the borrowing capabilities with the Stafford loans, there's almost two times as much increase in funding as we've seen in any other years,” he said.
The changes come at a time when the United States has hit two major education milestones, said Patricia Nash Christel, a spokeswoman for Sallie Mae, the largest student loan provider.
This past spring, the nation graduated 3.3 million high school students - the highest number in its history, and a record number of college students - some 18.3 million - are projected to enter college during the 2008-09 academic year.
More available funding “means we can help more students and we are pleased to be able to do that,” Christel said. “The cost of tuition has risen over time and the funding level of Pell grants and Stafford loans have not kept pace with increases in tuition, so these (legislative) changes are welcome news for families across the country.”
At UM, the changes bring much-needed relief for cash-strapped students.
On paper, the maximum awarded for an individual Pell Grant increased by $421 - from $4,310, which was allowed in the 2007-2008 academic year, to $4,731 for the coming academic year.
To some, the additional funding may not seem that big of a deal. But combined with the Stafford loan's 6 percent fixed interest for funding up to $3,500, plus the new option for students to borrow $2,000 more at a 6.8 percent fixed rate, the end result is historic.
For the first time in over a decade, the funding increases mean UM can offer financial aid packages that will cover the costs for nearly all tuition and fees for its neediest students, Hanson explained.
Last year, financial aid packages for UM's neediest students amounted to $7,810, which included $4,310 in Pell grants and $3,500 in Stafford loans, to cover UM's $12,000 price tag for the cost of education and room and board.
This year, students who get the $4,731 maximum amount in federal grants and choose to take the new $2,000 additional Stafford loan option will have aid totaling $10,231, which leaves them with less than $2,000 in unfunded expenses.
Of course, students must still find a way to pay the remaining expenses, but now they can worry far less about paying for their classes.
“Last year, our grants and aid that doesn't haven't to be repaid covered only
82 percent of the cost of tuition and fees, whereas this year the Pell grant will cover more than 90 percent of these costs,” Hanson said. “That is significant.”
While the changes are more than welcome, they come with a tremendous amount of work for Hanson's staff.
“In April and May, we sent out over 8,000 award letters estimating financial aid for the following fall and those letters went out before Congress passed the new law,” Hanson said. “Now we are sending out new letters to let people know about the changes.”
“The bottom line,” he said, “Congress created access for those who need it most by providing students with additional loan money. With the additional loan money added on, it's enough for an in-state Montana student to cover tuition and fees for an entire academic year.”
Reporter Betsy Cohen can be reached at 523-5253 or at bcohen@missoulian.com.
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