Recent changes in federal law could affect your financial aid eligibility for the upcoming academic year and in the future. Most of these changes are effective with the 2012-2013 school year (July 1, 2012 through June 30, 2013).

Direct Subsidized loans will not be eligible for an interest subsidy during the six-month grace period. This provision eliminates the interest subsidy provided during the six-month grace period for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014. If you receive a subsidized loan during this timeframe, you will be responsible for the interest that accrues while your loan is in the grace period. You do not have to make payments during the grace period (unless you choose to), but the interest will be added (capitalized) to the principal amount of your loan when the grace period ends. This provision does not eliminate the interest subsidy while the borrower is in school or during eligible periods of deferment.

Graduate and professional students are no longer eligible to receive Subsidized loans, effective for loans made for payment periods that begin on or after July 1, 2012. However, if you are a graduate or professional student, you may still qualify for up to $20,500 in unsubsidized loans each year.

The U.S. Department of Education can no longer offer borrowers repayment incentives, effective for loans first disbursed on or after July 1, 2012. The one exception to this provision is the repayment incentive that provides interest rate reductions to borrowers who agree to have payments automatically debited from their bank account.

Once you have received a Pell Grant for 12 semesters or the equivalent, you will no longer be eligible for additional Pell Grants. If you have exceeded the 12-semester maximum, you will lose eligibility for additional Pell Grants beginning in 2012-13 school year. Equivalency is calculated by adding together the percentage of your Pell eligibility that you received each year to determine whether the total amount exceeds 600%.

For example, if your maximum Pell Grant award amount for the 2010-2011 school year was $5,550, but you only received $2,775 because you were only enrolled for one semester, you would have used 50% of your maximum award for that year. If in the following school year, you were enrolled three-quarter time, you would have used 75% of your maximum award for that year. Together, you would have received 125% out of the total 600% lifetime limit.

When you complete the Free Application for Federal Student Aid (FAFSA) you receive an Expected Family Contribution (EFC), which is a number used to determine your federal student aid eligibility. The lower a student's EFC, the higher the student's federal student aid eligibility. For the 2012-13 school year, you will automatically qualify for an EFC of zero if your family income does not exceed $23,000. This is a reduction from the previous maximum income of $32,000.