Lee College students are experiencing the effects of federal budget cuts triggered by the March 1 sequester, and financial aid officials are doing their best to help students understand the changes.
“Because of the sequester, origination fees associated with Direct Stafford loans and parent loans for undergraduate students are going to increase,” explained Lee College Financial Aid Director Sharon Mullins. “These increases will reduce the amount of money students or parents receive.
“For example, say a student takes out a $3,500 Direct Stafford loan,” she continued. “As a result of sequestration, origination fees on this loan have increased to 1.051% (an increase of 0.51%), meaning the student will pay a $37 fee on this loan. As such, when a student receives their award, it will only be for $3,463.”
Additionally, Mullins added, monies awarded through grants such as the Federal Supplemental Education Opportunity Grant (FSEOG) and the Federal Work Study program will also decrease.
Thus far, there have been no cuts to the Federal Pell Grant.
According to Mullins, the Department of Education has asked college financial aid offices to proceed with current fees until technology and infrastructure is in place to accept the fee increase.
“We expect all summer loans and new aid year loads will have the new fee structure,” she added. “It is important students remember the Department of Education reserves the right to charge back the additional fee for all loans disbursed from March 1. So, just because they haven’t been affected yet, does not mean they will not be affected in the future.
“We know these changes are extensive and can be difficult to understand,” she added, “so we are encouraging all students and parents to contact us with any questions or concerns.”
For additional information, contact the Financial Aid Office at 281.425.6389.