Changes to Financial Aid may Increase Future College Costs

Hi Friend,

August has arrived and summer is beginning to wind down. As kids go back to school, some parents are starting to worry about how they’ll pay for college and some about how to start paying back outstanding federal student and parent PLUS loans. 

The US government has paused payments on federal student loans since March 2020, but the latest extension will expire on August 31, so now is the time to navigate the repayment process. Understanding your options for when the student loan interest accrual and payment pause ends is a great starting point. If you’re resuming federal loan payments, paying off private loans, or new to paying off student loans, consider these 3 pointers to prepare yourself.

The federal financial aid rules are changing drastically on July 1, 2023, which will first impact the 2024/2025 college year. According to college financial planning expert, Beth Walker, “College Costs Will Double or Triple for Many Families,” written for Rethinking65, “Not only will there be a learning curve for families but there is a financial landmine awaiting unsuspecting parents whose children will overlap during the college years, making college less affordable because of these changes.” Families who are setting up their college funding plan should start preparing for these financial aid changes beforehand. 

As the end of summer approaches, now is a suitable time to begin planning for how your family will pay for college expenses. If you have questions about paying for college, entering repayment, or questions about the upcoming changes to financial aid, reach out and schedule a consultation with me. I look forward to helping clarify the college funding process with you!

– Trixie

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Student loan repayment restarts in less than 50 days – here’s what borrowers should consider before Aug. 31

At this point, the federal student loan moratorium has been going on for more than two years, and it’s not yet clear what the Biden administration is planning to do about it.

Between rumors of student loan forgiveness and questions about the possibility of extending the moratorium further into 2022, the fact remains that over 44 million student loan borrowers are currently without a clear direction as to what’s supposed to happen next.

Below, CNBC details what you need to know about the upcoming Aug. 31 deadline and how the next few weeks could be pivotal if you still have student loans to pay off.

College Costs Will Double or Triple for Many Families

Effective July 1, 2023, the financial aid rules are changing, but financial advisors need to prepare their clients now for the “new normal.” Not only will there be a learning curve for families but there is a financial landmine awaiting unsuspecting parents whose children will overlap during the college years, making college less affordable because of these changes.

In the spirit of equity and access to higher education, the revised approach was really trying to help lower income households by eliminating two-thirds of the questions on the FAFSA (the No. 1 reason cited for not completing the application) and increasing Pell Grant eligibility (more free money for those that qualify).

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Westface College Planning is here to help ensure your planning is where it needs to be. Contact us with any questions you might have for the years to come!