Financial aid gets an overhaul

House and Senate negotiators reached a compromise late Wednesday on a bill that makes sweeping changes to the federal government’s college financial aid programs.

The bill cuts the interest rate students pay on subsidized Stafford loans by half over four years and increases the maximum Pell grant for needy students.

Under a new program, starting in 2009 borrowers won’t have to devote more than 15 percent of their discretionary income to student-loan repayments, although any unpaid amounts will be added to the loan balance in most cases.

The bill also establishes a tuition-assistance program for students who commit to teaching high-need subjects in low-income public schools and a loan-forgiveness program for other public-sector workers.

Kathleen Pender

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