Thousands of college students with Michigan Education Trust contracts could be eligible for more financial assistance, thanks to a change in how financial need is calculated.

The new rules are part of the federal Deficit Reduction Act of 2005 and take effect Saturday. But it’s not immediately clear how many colleges will make the changes or have additional resources available to benefit students this fall.

Michigan State University has mailed out letters to about 200 returning students with MET contracts who have applied for financial aid in past years. Letters to incoming freshmen soon will be sent, said Linda Sigh, associate director of the Office of Financial Aid.

“We do believe that in most cases, a student would now be eligible for additional need-based aid,” she said. “We’re thinking in the majority of cases, it’s going to be loan eligibility.”

The MET program allows parents, grandparents and others to prepay for college at public community colleges and state universities. Contracts also can be used at private- and out-of-state colleges but won’t necessarily cover the full cost of tuition.

Until now, prepaid tuition programs were treated as a student’s resource and resulted in a dollar-for-dollar reduction in financial aid. If a student had $10,000 of need and the MET contract was worth $6,000, financial aid officials would work to come up with a package to address the remaining cost of $4,000.

The new rules treat prepaid tuition plans as parents’ assets, and less than 6 percent of the contract’s value is used in determining financial need.

College financial aid officials are trying to sort it all out at a time when this fall’s financial aid packages already have been completed.

“It’s important that a student follow through with the financial aid office if they have a MET contract,” said Kim Donat, president of the Michigan Student Financial Aid Association.

MET officials say that the change makes the program more attractive and creates a level playing field by treating pre-paid tuition programs similar to other plans such as the Michigan Education Savings Program, a 401(k)-style plan.

“For this year, it’s going to be tough because the message is so late,” said MET Executive Director Robin McMillan.

U.S. Department of Education spokesman Dan Madzelan said the changes don’t affect Pell grant eligibility.

Most of the benefit to families, he said, will be eligibility for additional loans.

Source: www.lansingstatejournal.com

This entry was posted by Taman Siswa on Friday, June 30, 2006 at 10:19 pm and is filed under Education News, Financial Aid, Student Loan. Tags: College, Education News, Financial Aid, Grant, Loans, Student, . 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.