But the longer term outlook for student loans worries some experts. Despite tuition inflation, the federal government's maximum Stafford borrowing levels for undergraduates are expected to remain constant, ranging from $5,500 for dependent freshmen to $12,500 for adult upperclassmen. And the government's budget deficit reduction commission has recommended eliminating the interest rate breaks given to needy students starting in the fall of 2012, which could make the loans more expensive for many students.
[Learn more about subsidized Stafford Loans.]
The growing gap between college costs and students' ability to pay means "families are confronted with tough options," concedes Timothy A. Connell, president of the Georgia Student Finance Commission, which manages the Hope Scholarship program.
[Find out how to get a "tax scholarship" of up to $2,500.]
At least in his state, however, Connell believes that the aid shortage will not price good students out of college. Even if the size of the state grant is cut, a Hope Scholarship will pay most of the approximately $9,000-a-year tuition and fees bill at the state's most expensive public university, he notes. "This is not to minimize the challenge," he says. But studies show that college graduates tend to earn more money and get better jobs than those who skip higher education. "It is a good investment," Connell says.
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