A state student-loan program this year is increasing to $500,000 its direct grants to Montana college students, to help those having difficulty paying education bills.

The amount for the 2006 school year is more than twice the $200,000 in grants financed last year by the Montana Guaranteed Student Loan Program, which administers a variety of student-aid programs.

“This money serves as a lifeline for our students when other funds have dried up,” said Mick Hanson, director of financial aid at the University of Montana. “Many times these grants make the difference in a student staying in school and graduating, or dropping out and never returning.” Bruce Marks, director of the Montana Guaranteed Student Loan Program, announced the increase last month.

Program spokeswoman Lyndsay Mammen said the program wanted to increase the grants to help students in the face of rising college costs and cuts in federal student-aid programs.

Congress approved a bill last week that would eliminate a $4,000 deduction that federal taxpayers may take for college costs. The deduction is used primarily by middle-income families.

The grant money from Montana Guaranteed Student Loan Program is distributed in August to the University of Montana, Montana State University, community colleges and tribal colleges. The amount is based on the schools’ enrollment.

Financial aid officials at each school hand out the money, usually in $1,000 or $2,000 increments, to students who need help paying their college bills. The grants do not have to be repaid.

“They look at the students who have the greatest need,” said Mammen.

Mammen didn’t have exact figures on how many students received the grants last year, but said several hundred students get the grants.

The Montana Guaranteed Student Loan Program, a state agency run out of the commissioner of higher education office, stands behind student loans made by private institutions to Montana students.

If the loan goes into default, the program pays off the private lender (a bank, for example) and takes over the loan. The program attempts to collect the money from the person defaulting on the loan.

The program is funded by a fee of 1 percent of the loan amount.

Money for the grants comes out of the program’s general income, Mammen said.

Source: mtstandard.com

This entry was posted by Taman Siswa on Tuesday, May 16, 2006 at 10:56 pm and is filed under College Grant, Education News. Tags: bank, Bruce Marks, College, Congress, Education News, Financial Aid, Grant, Loans, Lyndsay Mammen, Mick Hanson, Montana, Montana Guaranteed Student Loan Program, Montana State University, private lender, Student, Student Loan, University of Montana, . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.