Latest news with #PellGrants
New York Times
17 hours ago
- Business
- New York Times
Your Questions About Education
In a recent newsletter, we asked for your questions about education. You wondered about student loans, the Columbia settlement and international students, among other topics. Today, The Times's expert beat reporters answer. (Got a question for us? Submit it here.) Student debt More than anything else, readers wondered about how they'd pay for college. Tara Siegel Bernard, who covers personal finance, fields these questions: How will the passage of the federal policy bill change Pell Grants and access to higher education for students from low-income families? Karen Stanish, Keene, N.H. Many people may find that pursuing higher education is more difficult or more expensive. Students who rely on their parents to take out loans will face new borrowing limits, as will graduate students. And new work requirements for Medicaid could make it harder to balance school with a job. On the other hand, students will be able to use Pell Grants for nondegree programs, like job training. But if students get other types of grants that fully cover the cost of attendance — from the school, from a state government, from a local scholarship — they can no longer get a Pell. Not enough has been said about the federal loan cap on graduate education (medical school, law school, etc.) from the policy bill. What is the change, and how will schools adjust? Matt Kleinman, Washington, D.C. Loans for professional schools will have a cap of $50,000 per year, with a $200,000 total limit, starting in July 2026. That is far less than the cost of training to be, say, a dentist or a doctor, as my colleague Roni Caryn Rabin reported. Some students might turn to private lenders. Average cost of public higher education in the U.S. $30,000 $24,920 for the 2024–25 school year $20,000 $10,000 1980-81 '90-91 '00-01 '10-11 '20-21 $30,000 $24,920 for the 2024–25 school year $20,000 $10,000 1980-81 '90-91 '00-01 '10-11 '20-21 Note: Data is in-state tuition and cost of room and board in 2024 dollars. Source: College Board By The New York Times Government action The Trump administration has accused several universities of fostering antisemitism and practicing discrimination through diversity programs; it has held back billions in government grants. Readers have watched these battles, sometimes with confusion. Michael C. Bender, who covers the president's domestic policy agenda, answers queries about them. Does the president have the power to demand concessions from our research universities and colleges, and, if so, why? Ruth D. Sundberg President Trump may make any demands he likes, but he cannot simply compel colleges to implement them. He's bound by federal law and the government's own rules. A lawsuit from Harvard, for instance, hinges largely on an argument that the government skipped specific fact-finding procedures before it imposed penalties. Still, the executive branch holds immense power, and receiving government contracts has always required some willingness to comply with an administration's priorities. Columbia University will pay $200 million to settle government investigations. Where does that money go? Ina Fried, Schenectady, N.Y. That money will go to the U.S. Treasury. But one senior White House official told reporters that Trump hoped Congress (which wields the constitutional power of the purse) would spend it on trade schools, apprenticeships or other work force training programs. My daughter is transferring to an H.B.C.U. in the fall. Has the Trump administration indicated any intent to go after historically Black colleges and universities in any way? Curtis Morgan, Strasburg, Va. No, not in the same broad way that the administration has targeted Ivy League schools. But historically Black colleges have not been immune from changes, either. Howard University lost some funding. Under the Trump administration, Tennessee State University lost a significant portion of its research budget and grants to cover tuition and housing for agricultural students. Funding Many of you sent questions about how the schools bear up in these conflicts. Alan Blinder, who has written about how universities spend their money, answers. Are public and private universities equally susceptible to challenges from the Trump administration? Charles Wain-Nye, Florida The government's pressure tactics may vary from school to school, but it doesn't seem to discriminate between public and private universities. Harvard is a major target, but so is the University of Virginia for its diversity policies. Three of the 10 schools that a government antisemitism task force identified for scrutiny are public institutions. These are all in places that voted for Kamala Harris, but the red-blue binary isn't absolute, either. In March, for example, the Education Department announced an investigation into the University of Alabama at Birmingham for 'race-based scholarships and race-based segregation.' Big universities have used their vast financial resources to absorb the impact of disputes with the administration. How are Trump's policies affecting smaller colleges? Chris Watson, Fenwick Island, Del. Researchers at schools of all sizes, even community colleges, have seen grants evaporate. And it's not just about research money. The administration wants schools to end D.E.I. programs, and the policy bill included changes for some financial aid programs. Many administrators, given the political climate, are thinking hard about which courses to offer and how to describe them. Some colleges are exploring ways to reduce their reliance on federal funding. Can they realistically sustain themselves without it? Anna Westbrook, Rochester, N.Y. Big research institutions depend on federal research funding: About 11 percent of Harvard's revenue is from federally sponsored research, though that kind of money also flows to much smaller schools. Private philanthropy and corporate giving could plug some of the gaps, but it's hard to imagine how American universities can find a combined $60 billion in recurring annual revenue. Say you were able to assemble a bunch of companies and individuals to create a privately run research endowment. If you doled out 5 percent each year — a common standard to ensure an endowment's long-term endurance — you'd need a fund with about $1.2 trillion. International students Many universities depend on students who need a special visa to attend. Anemona Hartocollis, who covers higher education, answers your questions about them. Should international students applying to U.S. universities be worried? How will the new developments affect them? Susie Cochin de Billy, Britain Nine out of 10 institutions still consider international recruitment a priority because it brings in a lot of money and talent. But the administration has tried to deport some students for their activism. In late March and early April, the government revoked visas or terminated legal status for more than 1,000 international students. A trade group has sued Marco Rubio, the secretary of state, over 'ideological deportation.' Admitted students, too, seem to be having a harder time getting visas, said a lawyer behind the suit. Government officials appear to be reviewing the social media feeds of applicants in search of pro-Palestinian sentiment or criticism of Trump. If fewer international students come here, will that lift the acceptance rate for U.S. citizens? Stef Morgan, Boulder, Colo. In theory, that could open up seats. But international students often pay full tuition, which subsidizes financial aid for American applicants. Losing these paying students would mean a financial blow, and universities could react by admitting fewer students overall. Share of international students Among full-time undergraduate and graduate students at 193 U.S. colleges 15% of students Covid 10% 5% 2000 2005 2010 2015 2023 15% of students Covid 10% 5% 2000 2005 2010 2015 2023 2020 Based on fall enrollment at schools that offer bachelor's degrees and above, with at least 1,000 students. Source: National Center for Education Statistics, Carnegie Classification By The New York Times More on higher ed: Harvard is said to be open to spending as much as $500 million to end its dispute with Trump. Manhattan Shooting A gunman with an assault rifle killed four people, and then himself, in a Manhattan office building last night. What happened? The man drove from Nevada and double parked in front of the skyscraper. In the lobby, he shot and killed a police officer, a woman trying to hide behind a pillar and a security guard behind a desk. He let a woman leaving an elevator go unharmed, then he rode it to the offices of a real-estate firm on the 33rd floor. There, he fatally shot a final victim and killed himself. Why did he do it? The motive isn't clear. The skyscraper was near the site of another high-profile Midtown attack: the killing of a health insurance executive. More details: The police officer killed was an immigrant from Bangladesh, with two children. His wife is pregnant with their third. Read about Officer Didarul Islam here. Employees at Blackstone, an investment company in the building, barricaded the doors using office furniture, The New York Post reports. War in Gaza Trump said that children in Gaza 'look very hungry' and spoke of 'real starvation' in the enclave, breaking from Israeli officials who have denied that people are starving there. Britain may recognize a Palestinian state, two senior government officials said, joining France and alienating Israel. Two of Israel's best-known human rights groups said Israel was committing genocide against Palestinians in Gaza. Most Israelis still support the war in Gaza, but dissent is growing louder. In March, Israel ended a truce with Hamas, hoping for a final victory. It didn't work, Patrick Kingsley writes. War in Ukraine Trump said he would give Russia 10 to 12 days to end the war in Ukraine or else face further sanctions. He previously spoke of a 50-day deadline. Russia has countered Ukrainian drones by imposing unpredictable internet blackouts on Russian cellphone networks. More International News Colombia convicted a former president, Álvaro Uribe, of bribery. Heavy rains in and around Beijing left at least 38 people dead. Flooding and landslides trapped villagers. After a five-year drought and decades of mismanagement, Iran risks running out of water within weeks. Finland's summers are short, precious and plagued by geese. They poop all over beaches. Economy Tariffs on Europe could make drugs like Ozempic more expensive. The French government opposes the E.U.'s trade deal with the United States, calling instead for tariff retaliation. A 'monster week' of economic news could help clarify how the U.S. is performing. Politics Instant Pot wanted to produce Trump-themed appliances. But it didn't have permission, and the Trump Organization's lawyers stopped it. Senate Democrats demanded all recordings and transcripts from last week's Justice Department interviews with Ghislaine Maxwell, Jeffrey Epstein's longtime partner, who is in prison for sex trafficking. (Late night hosts covered Epstein last night.) Other Big Stories Sending monthly checks to poor parents did not improve their children's well-being, new research shows. Most liver cancer is preventable, researchers found. The disease is linked to alcohol consumption. Exercise, eat well, challenge your brain and spend time with people. You've heard this advice from doctors for years. But a large new study published yesterday is a reminder that these habits really do work. People at risk for dementia — those with sedentary lifestyles and suboptimal diets — were urged to eat healthy, socialize, work out and train their minds with computer games. Cognitive scores shot up. Read more about the results here. — Pam Belluck, who covers neuroscience and brain health Zohran Mamdani won New York City's Democratic primary for mayor in part by listening to small businesses. Mainstream Democrats should follow his example, writes Lina Khan, a former chair of the Federal Trade Commission. Here's a column by Thomas Edsall on Trump and crypto. The 36 who fought back: Read about women in Guatemala who sought justice, years after they were raped in war. Claw grip: Women are showing off how much they can hold without a purse. Your pick: The most-clicked story in The Morning yesterday was about whether bread in Europe is healthier. Trending: People were searching online for Ryne Sandberg, a Hall of Fame second baseman whose Chicago Cubs career earned him a statue outside Wrigley Field. He died at 65 of prostate cancer. M.L.B.: The Cleveland Guardians pitcher Emmanuel Clase was placed on paid leave as the league investigates sports betting. W.N.B.A.: A Texas man received a two-and-a-half-year prison sentence for harassing and stalking Caitlin Clark. Astronomer — the tech company whose executives featured in the Coldplay camera debacle — got creative with its crisis management. It hired Gwyneth Paltrow, the ex-wife of the band's frontman Chris Martin, to answer questions on video as a 'temporary spokesperson.' The first question onscreen: 'OMG! What the actual f' See the video here. More on culture: An American Eagle ad featuring Sydney Sweeney and claiming she has 'great jeans' is facing accusations about eugenics, The Washington Post reports. Toss cucumber and avocado to make a delicious salad. Get more out of your appliances, including your dryer and garbage disposal, with these tricks. Become a D.J. Even reality stars are doing it as a side hustle. Here is today's Spelling Bee. Yesterday's pangrams were workman and workwoman. And here are today's Mini Crossword, Wordle, Connections, Sports Connections and Strands. Thanks for spending part of your morning with The Times. See you tomorrow. Sign up here to get this newsletter in your inbox. Reach our team at themorning@
Miami Herald
2 days ago
- Business
- Miami Herald
Changes to federal student loans leave aspiring medical students scrambling to cover costs
CHICAGO - Twenty-year-old Eric Mun didn't want to believe it: Only one kid in the family could make it to medical school - and it wasn't going to be him. Mun had done everything right. He graduated high school with honors, earned a scholarship at Northwestern University and breezed through his biology courses. He immigrated to Alabama from Korea as a toddler. From the quiet stretches of the South, he dreamed of helping patients in a pressed white coat. But dreams don't pay tuition. And with new borrowing limits, Mun's family can only support one child through school. "My parents already implied that my older brother is probably going to be the one that gets to go," Mun said. President Donald Trump's sweeping "big, beautiful" tax and spending bill, signed into law earlier this month, imposes strict new caps on federal student loans, capping borrowing for professional schools at $50,000 per year. The measure particularly affects medical students, whose tuition often exceeds $300,000 over four years. Aspiring physicians like Mun have been thrown into financial uncertainty. Many members of the medical community say the measures will send shock waves through a system already laden with economic barriers, discouraging low-income students from pursuing a medical degree. "It might mean there are people who want to be doctors that can't be doctors because they can't afford it," said Richard Anderson, president of the Illinois State Medical Society. Before the passage of Trump's budget bill, the Grad PLUS loan program allowed graduate students to borrow their institution's total cost of attendance, including living expenses. The program was slashed as part of a broader overhaul to the federal student loan system. Now, beginning July 1, 2026, most graduate students will be capped at $20,500 in federal loans per year, with a total limit of $100,000. Students in professional schools, like medical, dental or law school, will face the $50,000 annual cap and a total limit of $200,000. Mun's parents work at an automobile assembly plant. Throughout high school, he knew he would have to rely on scholarships and federal loans to pay his way through college. Mun's voice faltered. "I'm just trying to remain hopeful," Mun said. Also folded into the bill: the elimination of several Biden-era repayment plans, cuts to Pell Grants and limits to the Parent PLUS loans program, which allows parents of dependent undergraduates to borrow. Proponents of the Republican-backed bill said the curbed borrowing will incentivize medical schools and other graduate programs to lower tuition. The tuition of most Chicago-area medical schools is nearly $300,000 for four years, not including cost-of-living expenses. Northwestern University's Feinberg School of Medicine has a $465,000 price tag after accounting for those indirect costs, according to the school's website. Rosalind Franklin University of Medicine and Science trails closely behind at nearly $464,000. "One of the main concerns about the Grad PLUS program is money that is going to subsidize institutions rather than extending access to students," said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy. Still, many medical professionals expressed doubt that schools will adjust their costs in response to the bill. Tuition for both private and public schools has been steadily climbing for decades, up 81% from 2001 after adjusting for inflation, according to the Association of American Medical Colleges. There's some evidence that Grad PLUS may have contributed to those tuition hikes. A study co-authored by Turner in 2023 found that prices increased 65 cents per dollar after the program's introduction in 2006. There was also little indication that Grad PLUS had fulfilled its intended goal of expanding access to underrepresented students. But Turner cautioned against the abrupt reversal of the program. After accounting for inflation, the lifetime borrowing limits now placed on graduate students are lower than they were in 2005, she said. Many students may turn to private loans to cover the gap, often at higher interest rates. More than half of medical students relied on Grad PLUS loans, according to AAMC. The median education debt for indebted medical students is around $200,000, with most repayment plans lasting 10 to 20 years. The median stipend for doctors' first year post-MD was just $65,100 in 2024. "I think for many reasons, it would have been reasonable to put some sort of limit on Grad PLUS loans, but I think this is a very blunt way of doing it," Turner said. In a high-rise on Northwestern's downtown campus this month, 20 undergraduate students and alums from local colleges gathered for the Chicago Cancer Health Equity Collaborative Fellows program. The eight-week summer intensive offers aspiring medical professionals a deep dive into cancer health disparities information and research. Participants like Mun have been left reeling after the flurry of federal cuts. Alexis Chappel, a 28-year-old graduate of Northeastern Illinois University, watched her dad struggle with addiction growing up. She was deeply moved by the doctors who supported his recovery, and it inspired her to pursue medicine. But she has no idea how she'll cover tuition. "I feel like it's in God's hands at this point," Chappel said. "I just felt like it's a direct attack on Black and brown students who plan on going to medical school." Just 10% of medical students are Black and 12% are Latino, according to AAMC enrollment data. Socioeconomic diversity is also limited: A 2018 analysis found that 24% of students came from the wealthiest 5% of U.S. households. Tricia Pendergrast, who graduated from Feinberg in 2023, relied entirely on Grad PLUS loans to fund her medical education. Juggling classes and clinicals, she had little money saved and no steady stream of income. Pendergrast was so strapped for cash that she enrolled in SNAP benefits - a program also cut under Trump's budget bill. Now an anesthesiologist at University of Michigan Health, she's documented her concerns on TikTok for her 48,000 followers. "It's not going to improve representation, and it's not going to improve access," Pendergrast said. "It's going to act as a deterrent for people who otherwise would be excellent physicians." For low-income students, the application process is already fraught with economic obstacles, Pendergrast said. Metrics like GPA and the Medical College Admissions Test, or MCAT, are heavily weighted in admissions, and may disadvantage students from underresourced schools. Many students also lack mentorships or networks to guide them through the process, she noted. "I think the average medical student is going to be richer and whiter, and not from rural areas and not from underserved communities," Pendergrast said. The elimination of Grad PLUS loans comes amid a mounting nationwide physician shortage. A recent AAMC report predicted a shortfall of 86,000 physicians by 2036. Meanwhile, a significant portion of the workforce is poised to enter retirement: The U.S. population aged 65 and older is expected to grow 34.1% over the next decade. The shortage is particularly concentrated in primary care. In practice, that means longer waiting times for patients, and an increased caseload on physicians, who may already suffer from burnout. "If the goal is truly to make America healthy again, then we need to have a strong physician workforce … We should be coming up with ideas to make it more accessible for people who want to be doctors as opposed to hindering that," Anderson said. Sophia Tully, co-president of the Minority Association of Pre-Med Students at Northwestern, said she and her peers have struggled to reconcile with a system that often feels stacked against them. The 21-year-old plans on taking an extra gap year before medical school in an effort to save money. Tully summed up the environment on campus: "For lack of a better word, people are panicking." Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
Chicago Tribune
7 days ago
- Business
- Chicago Tribune
Changes to federal student loans leave aspiring medical students scrambling to cover costs
Twenty-year-old Eric Mun didn't want to believe it: Only one kid in the family could make it to medical school — and it wasn't going to be him. Mun had done everything right. He graduated high school with honors, earned a scholarship at Northwestern University and breezed through his biology courses. He immigrated to Alabama from Korea as a toddler. From the quiet stretches of the South, he dreamed of helping patients in a pressed white coat. But dreams don't pay tuition. And with new borrowing limits, Mun's family can only support one child through school. 'My parents already implied that my older brother is probably going to be the one that gets to go,' Mun said. President Donald Trump's sweeping 'big, beautiful' tax and spending bill, signed into law earlier this month, imposes strict new caps on federal student loans, capping borrowing for professional schools at $50,000 per year. The measure particularly affects medical students, whose tuition often exceeds $300,000 over four years. Aspiring physicians like Mun have been thrown into financial uncertainty. Many members of the medical community say the measures will send shock waves through a system already laden with economic barriers, discouraging low-income students from pursuing a medical degree. 'It might mean there are people who want to be doctors that can't be doctors because they can't afford it,' said Richard Anderson, president of the Illinois State Medical Society. Before the passage of Trump's budget bill, the Grad PLUS loan program allowed graduate students to borrow their institution's total cost of attendance, including living expenses. The program was slashed as part of a broader overhaul to the federal student loan system. Now, beginning July 1, 2026, most graduate students will be capped at $20,500 in federal loans per year, with a total limit of $100,000. Students in professional schools, like medical, dental or law school, will face the $50,000 annual cap and a total limit of $200,000. Mun's parents work at an automobile assembly plant. Throughout high school, he knew he would have to rely on scholarships and federal loans to pay his way through college. Mun's voice faltered. 'I'm just trying to remain hopeful,' Mun said. Also folded into the bill: the elimination of several Biden-era repayment plans, cuts to Pell Grants and limits to the Parent PLUS loans program, which allows parents of dependent undergraduates to borrow. Proponents of the Republican-backed bill said the curbed borrowing will incentivize medical schools and other graduate programs to lower tuition. The tuition of most Chicago-area medical schools is nearly $300,000 for four years, not including cost-of-living expenses. Northwestern University's Feinberg School of Medicine has a $465,000 price tag after accounting for those indirect costs, according to the school's website. Rosalind Franklin University of Medicine and Science trails closely behind at nearly $464,000. 'One of the main concerns about the Grad PLUS program is money that is going to subsidize institutions rather than extending access to students,' said Lesley Turner, an associate professor at the University of Chicago Harris School of Public Policy. Still, many medical professionals expressed doubt that schools will adjust their costs in response to the bill. Tuition for both private and public schools has been steadily climbing for decades, up 81% from 2001 after adjusting for inflation, according to the Association of American Medical some evidence that Grad PLUS may have contributed to those tuition hikes. A study co-authored by Turner in 2023 found that prices increased 65 cents per dollar after the program's introduction in 2006. There was also little indication that Grad PLUS had fulfilled its intended goal of expanding access to underrepresented students. But Turner cautioned against the abrupt reversal of the program. After accounting for inflation, the lifetime borrowing limits now placed on graduate students are lower than they were in 2005, she said. Many students may turn to private loans to cover the gap, often at higher interest rates. More than half of medical students relied on Grad PLUS loans, according to AAMC. The median education debt for indebted medical students is around $200,000, with most repayment plans lasting 10 to 20 years. The median stipend for doctors' first year post-MD was just $65,100 in 2024. 'I think for many reasons, it would have been reasonable to put some sort of limit on Grad PLUS loans, but I think this is a very blunt way of doing it,' Turner said. In a high-rise on Northwestern's downtown campus last week, 20 undergraduate students and alums from local colleges gathered for the Chicago Cancer Health Equity Collaborative Fellows program. The eight-week summer intensive offers aspiring medical professionals a deep dive into cancer health disparities information and research. Participants like Mun have been left reeling after the flurry of federal cuts. Alexis Chappel, a 28-year-old graduate of Northeastern Illinois University, watched her dad struggle with addiction growing up. She was deeply moved by the doctors who supported his recovery, and it inspired her to pursue medicine. But she has no idea how she'll cover tuition. 'I feel like it's in God's hands at this point,' Chappel said. 'I just felt like it's a direct attack on Black and brown students who plan on going to medical school.' Just 10% of medical students are Black and 12% are Latino, according to AAMC enrollment data. Socioeconomic diversity is also limited: A 2018 analysis found that 24% of students came from the wealthiest 5% of U.S. Pendergrast, who graduated from Feinberg in 2023, relied entirely on Grad PLUS loans to fund her medical education. Juggling classes and clinicals, she had little money saved and no steady stream of income. Pendergrast was so strapped for cash that she enrolled in SNAP benefits — a program also cut under Trump's budget bill. Now an anesthesiologist at University of Michigan Health, she's documented her concerns on TikTok for her 48,000 followers. 'It's not going to improve representation, and it's not going to improve access,' Pendergrast said. 'It's going to act as a deterrent for people who otherwise would be excellent physicians.' For low-income students, the application process is already fraught with economic obstacles, Pendergrast said. Metrics like GPA and the Medical College Admissions Test, or MCAT, are heavily weighted in admissions, and may disadvantage students from underresourced schools. Many students also lack mentorships or networks to guide them through the process, she noted. 'I think the average medical student is going to be richer and whiter, and not from rural areas and not from underserved communities,' Pendergrast said. The elimination of Grad PLUS loans comes amid a mounting nationwide physician shortage. A recent AAMC report predicted a shortfall of 86,000 physicians by 2036. Meanwhile, a significant portion of the workforce is poised to enter retirement: The U.S. population aged 65 and older is expected to grow 34.1% over the next decade. The shortage is particularly concentrated in primary care. In practice, that means longer waiting times for patients, and an increased caseload on physicians, who may already suffer from burnout. 'If the goal is truly to make America healthy again, then we need to have a strong physician workforce … We should be coming up with ideas to make it more accessible for people who want to be doctors as opposed to hindering that,' Anderson said. Sophia Tully, co-president of the Minority Association of Pre-Med Students at Northwestern, said she and her peers have struggled to reconcile with a system that often feels stacked against them. The 21-year-old plans on taking an extra gap year before medical school in an effort to save money. Tully summed up the environment on campus: 'For lack of a better word, people are panicking.'
Boston Globe
22-07-2025
- Business
- Boston Globe
How will changes in federal student loans impact you?
Here's what these changes mean for borrowers around the country, and why student debt is both a product of and helps to exacerbate the racial wealth gap. There are new limits on federal student lending Federal student loans for graduate professional degrees, such as medical and law school, will be capped $50,000 a year, or $200,000 total. Parent PLUS loans, used by caregivers to borrow for their children's undergraduate degree, will be capped at $20,000 a year, $65,000 total. Grad PLUS loans will be eliminated. Graduate students will still be able to borrow federal student loans, but will be capped at $20,500 annually, $100,000 total. Federal student loan borrowers will now have a lifetime limit, considering undergraduate and graduate education, of $257,500 in federal student loans. Students who have full-ride scholarships will no longer be eligible for Pell Grants, which is federal aid that does not need to be repaid. However, Pell Grants will now be available for job training programs, including at community colleges. Paying off loan debt Borrowers will now have only two ways they can pay off their federal student loans: Advertisement Enroll in a standard payment plan, with fixed monthly payments based on the initial amount borrowed. Enroll in the Repayment Assistant Plan, with variable monthly payments based on income. Whereas borrowers facing economic hardship, such as lost income, can currently defer payments for up to three years without accruing interest, under the changes, borrowers facing economic hardship can only pause payments for nine months within a 24 month period. Interest will be accrued during this time. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up Changes to lending and paying of debt will go into effect July 1, 2026. What are the current interest rates for federal student loans? Undergraduate student loans are 6.39% fixed interest rate Graduate or professional student loans are 7.94% fixed interest rate Grad PLUS and Parent PLUS loans are 8.94% What other changes are on the horizon? President Trump aims to eliminate President Biden's SAVE Plan, which put a pause on loan repayments and eliminated interest accruals for approximately 8 million student borrowers, by July 2028. In the meantime, borrowers enrolled in the SAVE Plan will begin accruing interest again on August 1. Payments on the principal remain paused. Advertisement What options do current student loan borrowers have? If borrowers are considering changing plans or consolidating their loans in light of these changes, Natalia Abrams, founder and president of the Student Debt Crisis Center, advises them to speak to an adviser before moving forward, especially to make sure they understand the details of a new plan and the implications of consolidation. Abrams suggests saving as much documentation as possible, both from the student loan service provider and For the millions of borrowers who have or are expected to default in the coming months, Abrams stresses: There are options. For example, borrowers can enter How does student debt relate to the racial wealth gap? Groups that have been under-represented in higher education — Black and brown Americans and women — are more likely to rely on student debt for college, graduate and professional school. That's in part because they have less generational wealth to tap into, making them more dependent on loans. Students of color are also targeted by and overrepresented at private, for-profit institutions that cost more, have lower graduation rates and worse job outcomes. Once under-represented students take on debt, less generational wealth and racial and gender pay gaps makes those loans harder to pay off. To give a sense of the disparity: Advertisement Disparities in lending reach back decades and hinge on federal lending policies. Racial minorities, particularly Black Americans, were explicitly excluded from government-backed and subsidized mortgage programs that were pivotal in helping white families build wealth. People who have been historically excluded from credit have fewer assets and worse credit scores, making them more vulnerable to high-priced, high-risk loans. For example, the sub-prime mortgage crisis that kicked off the 2008 economic crisis primarily impacted Black, brown and low-income families. According to the Student Borrower Protection Center, the unequal burden of student debt 'fuels economic, gender, and racial inequality, inhibits asset accumulation, accelerates wealth gaps, and carves out a generational divide that, even in the best of circumstances, will take decades to erase.' Resources for federal student loan borrowers The Advertisement The This story was produced by the Globe's team, which covers the racial wealth gap in Greater Boston. You can sign up for the newsletter . Mara Kardas-Nelson can be reached at
Time of India
21-07-2025
- Business
- Time of India
One Big, Beautiful Bill: How Pell Grant expansions will support millions in workforce training programs starting 2026
(AI Image) The US government is set to expand Pell Grants to include new workforce training programs as part of the landmark legislation signed by President Donald Trump. The law, known as the "One Big, Beautiful Bill Act," aims to provide financial aid to students enrolled in short-term post-high school training programs lasting between eight and 15 weeks. This expansion is scheduled to begin in July 2026, marking a significant shift in how federal aid supports non-traditional education paths. Under this law, the US Department of Education will be responsible for vetting and authorizing schools to receive Pell Grant funding for these new programs. The move is designed to assist millions of Americans seeking quick, targeted training in fields such as cosmetology and welding, thereby expanding access to career-focused education beyond traditional college degrees. Pell Grant expansion to short-term workforce training programs The One Big, Beautiful Bill Act establishes a new type of Pell Grant specifically for students enrolled in workforce training programs that are shorter than traditional college semesters. The expansion covers programs lasting from eight to 15 weeks, addressing the growing demand for flexible educational opportunities aligned with labor market needs. This initiative will allow students in approved programs to qualify for federal financial aid, providing critical support for individuals pursuing skills-based training. The Education Department is tasked with beginning the review and approval of eligible programs by July 2026, ensuring that schools meet federal standards to access Pell funds. Federal student loan repayment plan overhaul The legislation also replaces all existing federal student loan repayment programs for new borrowers after July 1, 2026, with two streamlined options: a standard repayment plan and an income-based plan. This change affects new borrowers, while the over 40 million Americans who currently hold federal student loans will retain access to some legacy repayment plans. However, around 8 million borrowers enrolled in President Joe Biden's signature repayment program will be required to transition to one of the new plans by 2028. The Federal Student Aid office, a division of the Education Department, will oversee this transition and manage repayment operations. New accountability rules for colleges In addition to financial aid changes, the bill mandates the Education Department to enforce new accountability standards on colleges and universities. The so-called "do no harm" test aims to prevent federal loans from being available to programs that fail to deliver a positive return on investment for students. To implement these rules, the Education Department will need to analyze extensive data from multiple sources, including colleges, the Internal Revenue Service, the Bureau of Labor Statistics, and state agencies. This data-driven process will assess program outcomes across thousands of schools and tens of thousands of programs over several years. Department of Education staffing and implementation challenges The Education Department faces considerable challenges in executing the new law amid significant workforce reductions. Since the beginning of the year, the department's staff has been cut by half, and recent Supreme Court rulings have allowed layoffs of more than 1,000 employees to proceed while legal disputes continue. Beth Akers, a senior fellow at the American Enterprise Institute, expressed concerns about the department's capacity to implement the legislation effectively. She told USA Today during a recent webinar, "I do have significant concerns that the speed of the cuts will have left us with a department that is unable to effectively implement this legislation." Similarly, Jon Fansmith, senior vice president for government relations at the American Council on Education, warned of upcoming difficulties, as reported by USA Today : "You can definitely anticipate a lot of problems." Previous challenges with federal student aid programs The department's recent history includes difficulties implementing large-scale changes. For example, the rollout of FAFSA simplification legislation in 2020 experienced significant problems that jeopardized financial aid for millions of students. Staffing shortages and reliance on contractors were among the factors cited for the flawed execution. Despite this, Education Department officials maintain that the agency is prepared to carry out the One Big, Beautiful Bill Act's mandates. Jeffrey Andrade, a senior official, released guidance for implementation on July 18, with promises of more detailed information in the following weeks and months. Deputy press secretary Ellen Keast told USA Today , "We will continue to deliver meaningful and on-time results while implementing the President's OBBB ('One Big Beautiful Bill') to better serve students, families, and administrators." Outlook for students and schools Financial aid administrators have already raised alarms about the potential for disruption as the department reallocates responsibilities to meet new demands. Melanie Storey, president of the National Association of Student Financial Aid Administrators, stressed to USA Today the need for clear plans: "With significantly more work on the horizon to implement the One Big Beautiful Bill Act, we reiterate our concerns that the Trump administration has not shared the details of a plan to redistribute the Department's work in a way that does not cause significant disruption for America's college students." As the US prepares for these major changes in student aid and workforce training support, both students and educational institutions will be closely watching the department's progress in meeting the ambitious goals set by the new law. TOI Education is on WhatsApp now. Follow us here . Ready to navigate global policies? Secure your overseas future. Get expert guidance now!
