In addition to today being the deadline to turn in the Free Application for Federal Student Aid (FAFSA) for the 2009 – 2010 school year, tomorrow marks the day many significant changes will take affect. July 1st is the start date for important changes in student loans and a significant increase in the maximum Pell Grant award.

FAFSA Deadline

According to the FAFSA web site, today is the last day to get in your application for the 2009 – 2010 school year.  Don’t panic – this applies mostly to students who plan to or are currently attending summer classes at both traditional and online schools and have not yet submitted their application for student aid for that term.

If you are planning on attending school in the fall, you still have plenty of time to get your application in for federal aid.  You may want to check your state financial aid deadlines, however, because many times these are earlier.  Also, the sooner you can get your application in for federal and state student aid, the better.  State funds, especially, run out quickly.

Changes to Student Loans

Tomorrow is the end of the Federal Family Education Loan Program (FFELP), which means that federal student loans will no longer be made through private lenders. The federal government will now directly (through the college) lend students money for college.

Other changes to student loans include interest rate decreases to federal student loans.  For instance, new need-based subsidized Stafford loans’ interest rates will decrease more than one percent – from 5.6 percent to 4.5 percent for undergraduates.

Increase in Pell Grant and New Federal Grant

Those who qualify for the maximum Pell Grant award amount will see their award increase by $200.  This is a total of $5550 for the 2010 – 2011 academic school year.

Also, the federal government will begin offering a new grant on July 1st – the Iraq and Afghanistan Service Grant.  This grant is for students under 24 who are not eligible for the Pell Grant but whose guardian or parent was killed in connection with service in Iraq or Afghanistan following September 11, 2001.  The award amount for this grant is equal to the maximum Pell Grant award amount, or $5550.

In order to qualify for federal loans or grants, you must first fill out the FAFSA.  Even if you believe that you do not qualify, you should go online and apply as soon as possible.  You might be pleasantly surprised.  Those who apply early will get the most amount of funds available.