Changes for the 2011-2012 Academic Year

Funding Ends for the Federal Academic Competitiveness Grant / SMART Grant Programs

 Congress funded the Federal Academic Competitiveness Grant  and Federal SMART Grant Programs through the 2010-2011 Academic year. At this time, we do not anticipate that Congress will vote to continue these programs.

PLUS Loan Processing

Starting with the 2011-2012 year, families will need to complete  the Free Application for Federal Student Aid ("FAFSA")  before  we will be allowed to certify an application for a Federal PLUS loan.

How the Fiscal Year 2011 Spending Bill Would Impact Student Aid Programs

The House Appropriations Committee released legislative language on April 12, 2011  for a continuing resolution (CR) that will fund the Federal government for the remainder of fiscal year (FY) 2011.  This long-term FY2011 CR is the result of a last-minute budget deal that that was struck between Republicans and Democrats late Friday night, April 8, 2011, to prevent a government shutdown.  The new CR cuts a total of $38.5 billion from non-defense FY 2010 spending levels. This includes the $12 billion in reductions previously approved by Congress and signed into law under three previous continuing resolutions. The cuts impact many large student aid programs for the 2011-12 academic year.

This bill was passed by both the House and the Senate on April 14, 2011

 

Maintaining Maximum Pell Grants

In a major victory for students and families, the CR maintains the maximum $5,550 Pell Grant for the 2011-12 academic year.  The original long-term spending bill (H.R. 1) that was passed by the House in February called for an $845 cut to the maximum grant, reducing it to $4,705. 

Eliminating Year-Round Pell

The long-term CR does call for the elimination of second scheduled awards within an award year (also known as year-round Pell Grant) -- a proposal originally proposed in President Obama's FY 2012 budget request. The proposal was fast-tracked to be included in the FY 2011 spending bill, which includes a provision to permanently eliminate year-round Pell, beginning with the second scheduled award for the 2011-2012 academic year.  The elimination is projected to save $8 billion over the next two years and will help lower the projected $20 billion Pell Grant shortfall that would have occurred for academic year 2012-13 if the program was unchanged.

New FSEOG Allocations

The spending bill would also cut the Federal Supplemental Educational Opportunity Grant Program  ("FSEOG") by $20 million, an amount that will be reduced from its FY 2010 appropriation of $757 million.  H.R. 1 would have eliminated FSEOG funding completely, so the reduced funding can be seen as a partial victory.  However, the change in FY2011 FSEOG appropriated funds at this point in the year will require the Department to release new allocations. Due to allocation formulas, reductions will not likely be an equal amount or percentage.

Additional Cuts

Changes to other aid programs include:

In addition, the bill calls for a 0.2 percent cut to all Education programs across-the-board.  This would impact most student aid programs -- and would be taken in addition to the $20 million already reduced from FSEOG.  The Pell Grant would in all practical terms be shielded from this provision, and the Direct Loan, as an entitlement program, will probably be unaffected.  We expect that the Perkins Loan program will also be unaffected.

REFERENCE: National Association of Student Financial Aid Administrators' Today's News, April 13, 2012

 Regulatory Changes

The Department of Education has proposed a number of changes that will  go into effect on July 1, 2011.

What Will Congress Do?

Congress will now move on to debate the federal budget for the 2012 Fiscal Year (which begins in October). The Republican budget proposal contains significant cuts to federal student aid programs.

Learn How You Can Get Involved

Let Congress know how important federal student aid is by sharing how it has helped you

 

for more information

Updated August 16, 2011