Funding Your Graduate Education: Questions Answered by Michael Light, Director of Financial Aid

               With all the changes to the federal budget as a result of sequestration, many current and prospective students have voiced concerns regarding the availability of financial aid.  These concerns are 100% valid and most students will be affected by cuts to the federal budget (see below).  While changes are coming down the line, students should feel assured that funding a graduate education will still be as possible as ever.  Below are some common questions current and future students have asked and their answers.

Will the federal budget cuts mean that I am less likely to receive grants/scholarships?

No, completing the Free Application for Federal Student Aid (FAFSA) determines students’ eligibility for federal work-study and federal loans.  The vast majority of scholarship aid available at SP2 comes directly from the school (over 95%).  The other 5% is almost all funding students have been awarded in recompense for some kind of service, such as AmeriCorps Segal Education Awards.  While AmeriCorps benefits may be affected going forward, Penn SP2 will continue to commit nearly $3M of our own resources to fund scholarships regardless of federal budget cuts. 

Will I have trouble obtaining federal student loans?

No, federal student loans will be available just as they have been.  However, the origination fees associated with 2 federal loan programs will increase.  The origination fee for the Federal Direct Stafford Loan will increase from 1% to 1.05%.  The origination fee for the Federal Graduate PLUS loan will increase from 4% to 4.2%.  The Federal Perkins Loan will continue to be free of fees.

Will work-study still be available?

Federal Work-Study funding will be cut by $86M.  This may mean that fewer students will be able to receive work-study but to what degree that may or may not happen is still unclear.  For our MSW students that would normally use their field placement as their work study job, SP2 would award an additional $1,000 in grants for any full-time MSW student denied work-study due to the reductions in federal funding.

While these cuts are not ideal, they have had no effect on the scholarships or loans that students can obtain.  Every dollar one would need to fund their graduate education is still available.  For students that intend on using the Pay As Your Earn Plan and Public Service Loan Forgiveness (http://studentaid.ed.gov/repay-loans/understand/plans/pay-as-you-earn), the slight increase in fees may not even be incurred by the student; the total amount paid by the student may remain the same.  Please don’t hesitate to contact me at light@sp2.upenn.edu or 215-746-5894 should you have any questions.