Students struggling to pay college bills have turned to Georgia’s new low-interest loan program for help, according to data the Georgia Student Finance Commission shared Wednesday.
About 6,000 students applied for the Student Access Loan Program — up from the nearly 5,100 who applied during the first round of applications last year. While the state had to conduct a second round of applications last year to award the money, that should not be necessary this year because more students know of the program, said Tracy Ireland, director of the commission’s post-secondary student and school services.
Georgia lawmakers set aside $20 million in lottery revenue for the loan program when they overhauled the merit-based HOPE scholarship, cutting the award amount for recipients. Besides HOPE, the Georgia Lottery also funds the state’s pre-kindergarten program.
The loans won’t cover all college costs, as the maximum annual award is $10,000. Instead, the program was designed to fill financial holes for students and families who’ve exhausted all other options and still need additional money.
So far, the commission has approved 3,479 applications and awarded $21.5 million, Ireland said. In all, the commission has about $24 million to lend because there was some money left over from last year and because some students already repaid their loan.
Student need has grown as tuition and fees increase annually. Of Georgia college seniors who graduated from a four-year school in 2011, 58 percent borrowed, and they owe on average $22,443, according to the Project on Student Debt.
To be eligible for the loan, students must have applied for and exhausted all other federal and state loans, scholarships and grants.
The loan carries a 1 percent interest rate if students graduate on time, which would be considered four years for a bachelor’s degree. The rate can increase to as much as 8 percent if students take much longer to finish.
To be eligible for the loan, students must maintain “satisfactory academic progress” in college, which is often defined as a 2.0. grade point average. HOPE requires at least a 3.0.
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