Starting Monday, Georgia students can apply for a low-interest loan designed to serve as a "gap stop" for those who need extra help affording college.
The program is no money tree. Loans are estimated to reach less than 6,000 of the neediest students. Recipients may be arbitrarily chosen via computer.
Though lawmakers last February set aside $2o million in lottery revenue to launch the Student Access Loan Program as part of the HOPE scholarship overhaul, details of the program were only learned Tuesday by The Atlanta Journal-Constitution.
The maximum award to a student will be $10,000, said Tim Connell, president of the Georgia Student Finance Commission, which oversees HOPE and administers the loans. He estimated the average award will be $3,500, which would allow about 5,700 students to receive the loan.
Connell expects requests to exceed the money allotted. Should that happen, a computer will randomly select who receives a loan.
"This loan is not intended to pay for all of college," Connell said. "This is considered a gap stop for students and families that have exhausted all other options and still need additional money. Think of this as a last resort."
To be eligible, students must have applied for other aid including federal and state loans, scholarships and grants.
More Georgia families need aid because of changes to the HOPE scholarship. Starting in August, the scholarship will cover full tuition for only the most accomplished students, about 10 percent of recipients. It will no longer provide money for fees or books.
Gov. Nathan Deal and other lawmakers said the changes will keep the cash-strapped program from going broke. They acknowledged it may create a hardship for some families, but said the loan program will provide some relief.
Stephanie Kratofil's daughter receives HOPE, a federal Pell Grant and other aid to attend Georgia Southern University. Her daughter couldn't find a summer job and the family worried about paying tuition now that HOPE won't cover it all.
"This loan would be a godsend," Kratofil said. "This will give a lot of people a sigh of relief."
The commission will receive the money July 1 and all should be dispensed by Aug. 1, said Tracy Ireland, director of the commission's post-secondary student and school services.
Ireland and others started working on program requirements and the application in the spring. They asked high school guidance counselors and college financial aid offices to spread word about the loan. Students who receive emails from the commission will get one explaining how the loan works and that they have until July 15 to apply.
The loan program is based on one lawmakers passed in 2008 but never funded. Students are eligible if they graduate high school with at least a 2.5 GPA and maintain at least a 2.0 in college. HOPE requires students to have at least a 3.0.
The loans will be paid to the college and can be used toward any part of a student's cost of attendance, Ireland said.
The repayment term is 10 years after graduation, but the debt would be forgiven for those who teach math, science, technology or engineering in Georgia public schools. Each year spent teaching forgives one year of the loan.
With the loans carrying just a 1 percent interest rate, Connell expects many applicants to request the $10,000 maximum. That doesn't mean they all will get it.
If a student's application is selected for the loan, the commission will forward the information to the college to confirm how much the student needs. The loan will equal the school-certified amount, Ireland said. This process will continue until the entire $20 million is spent.
Students will have to apply for the loan annually and there is no guarantee those who receive it this year will get it again. Connell expects demand to increase annually as more students attend college and tuition and other costs increase.
"Some of the students who receive the loans will be HOPE students but it is not limited to them," Connell said. "You could say that this is beyond HOPE."
Student Access Loan Program
Starting Monday families can apply for a low-interest college loan through Georgia's new Student Access Loan Program. The deadline is July 15. Applications, eligibility requirements and additional information can be found at: www.gacollege411.org.
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