S.C. of Merrick, NY writes: I'm hearing so many things about changes to student loans, particularly the Stafford loans. I'm so confused. Could you clear the air?

The College Whisperer replies:

Clearing the air, as far as Congress is concerned, would take a heck of a lot more Febreze® than student loans could possibly pay for. That said, here's the low down on the changes to Direct Student Loans the feds enacted effective July 1, 2012, courtesy of our friends at the Student Loan Network:

No more subsidized loans for grad students. Just like undergraduates, graduate students were previously able to receive both subsidized and unsubsidized loans. Starting this year, only unsubsidized loans will be available for grad students at a 6.8% interest rate.

Elimination of interest subsidy for grace periods. Subsidized Stafford Loans were less expensive than their unsubsidized counterparts because 1) the interest rate was lower and 2) interest was subsidized while enrolled in school and durning the 6 month grace period after leaving school. Starting this year, there will be no interest subsidy during grace periods, however, the subsidy will still exist while enrolled in school at least half-time.

Decreased eligibility. Last December, President Obama signed the Consolidated Appropriations Act 2012, which brought with it a change to the Pell Grant Program for the 2012-2013 year. Starting in Fall 2012, the Pell Grant is limited to 12 full-time semesters per student. The way this is calculated is by percent, where 600% is the maximum a student is eligible for. For example, if you receive a maximum Pell Grant for both semesters, your percentage used would be 100%.

Lowered income limit for automatic zero . When families file the FAFSA (Free Application for Federal Student Aid), they receive their Expected Family Contribution (EFC) - a number detailing how much of the school costs a family should be able to provide out of pocket. In previous years, anyone with an income of $32,000 or less received an automatic zero for the EFC. This allowed lower income families to be eligible for more need-based aid. This year, the income limit has been reduced to $23,000, which will cut funding for many students.

Termination of repayment incentives. The Department of Education can no longer offer repayment incentives to Direct Loan borrowers, except an interest rate reduction for auto payment. Again, this is only for loans originated after July 1, 2012 -- Repayment incentives may still be available for older loans.

These changes will not affect loans that were originated before July 1, only loans originated for 2012-2013.

Yes, the government giveth, and the government taketh away. Make it tougher on students to pay for college, to repay their debts and to get a clean start on a career without the heavy burden of student loans.

Could the motive of those in Congress be to make college less affordable, keeping students out of college, dumbing down the populace, thus assuring the re-election of these dimwits for years to come? Who knows!

What we do know is that borrowing to pay for college -- adding to the one trillion dollars in student debt now on the ledgers --has become more difficult, and more costly.

Avoid student debt, when you can (think scholarships, grants, work-study, 529 Plans). Borrow responsibly, if you must.

Plan. Prepare. Prevail!

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