Graduate Students May Face Higher Debt Under Obama's Budget Plan (VIDEO)

WASHINGTON -- In his 2011 State of the Union address, President Obama promised that investment in education and getting the next generation of Americans ready to face their own "Sputnik" moment would be a focus of his administration. But at least one component of his FY 2012 budget, which will be released tomorrow, will likely pile more debt upon students who decide to pursue graduate school, potentially making the dream of higher education even more unattainable for many Americans. The move, say administration officials, is needed to ensure that a popular financial aid award stays available at current levels.

In an interview on CNN's "State of the Union" on Sunday, Office of Management and Budget Director Jacob Lew said that interest on graduate school loans will begin building up while students are still in school. Currently, interest does not begin compiling until after students graduate.

Host Candy Crowley questioned Lew about whether this would make graduate school less accessible for many Americans:

CROWLEY: Here's the problem, I guess. If you are a graduate -- let's take one of your examples. You're a graduate student; you are, right now, getting loans. You don't have to pay those loans or any interest on them until you graduate. But now you have to pay -- or it accumulates, I'm assuming -- you have to pay interest beginning on day one of grad school, and that makes it so that you can't go to grad school.

LEW: Well, let's just be clear. Interest will build up, but students won't have to pay until they graduate. So it will increase the burden for paying back the loans, but it will not reduce access to education. That's, I think, part of how you can responsibly have a plan that deals with the challenge of solving our fiscal crisis, getting out of the situation where the deficit is growing and growing, but also investing in the future.

WATCH:

Lew's assurance that students still won't have to start paying back their debt until after they graduate might not offer much comfort to people who emerge from graduate school and face, on average, more than $40,000 in debt, according to FinAid.org. Students pursuing a medical degree can face more than $100,000 in debt.

Obama himself has acknowledged the burden of heavy student debt, saying in his 2010 State of the Union speech, "In the 21st century, the best anti-poverty program around is a world-class education. No one should go broke because they chose to go to college."

An administration official estimates that reducing loan subsidies for graduate students would save the government $2 billion next year and $29 billion over 10 years. The official added that "experts think the subsidy has failed to encourage more students to attend graduate school and it isn't well-matched to borrowers who have trouble repaying the loans."

The savings will go toward keeping the maximum Pell Grant award at $5,500. Additionally, Lew told CNN that the administration is proposing to end the "year-round Pell," which allows students to use the financial aid grant for summer school. An Obama administration official estimated that the change would save $8 billion next year and $60 billion over a decade.

Comments

[retired-engineer]

01:46 PM on 02/15/2011

Should those who receive Ph D degrees in science and technology be expected to understand the interactions science and technology with society? Should scientists and engineers ignore the impact of their disciplines on public health, the environment, and ecology? Should those who receive Ph D's in engineerin­g be expected to have an understand­ing of biology or chemistry or cancer. Some contend that engineering values fall more in the efficiency and the corporate economic areas than in improving on public health and protecting the environment. Often undergraduate engineering students have little or no interest in taking even basic courses in the molecular sciences (biology, inorganic chemistry,organic chemistry, and nuclear chemistry) that deal with understanding the nature of cancer and how cancer might be less of a problem if sound ideas were followed. Take our Nation's coke plants designed by engineers. Associated with these coke plants often are big cancer clusters. Many do not understand the carcinogenic nature of unwanted emissions from the coking of coal. They lack an understanding of how cell mutations can come about from chemical exposure - in other words how cancer develops because of their lack of understanding of elementary biology when designing and erecting chemical manufacturing structures. Perhaps some recall the Erin Brockovich movie dealing with hexavalent chromium where the Chromium-6 was put into the cooling water for compressors to reduce corrosion costs and then dumped into the drinking water for three California communities for several decades, causing big clusters of cancer.

[tuliehowller]

08:55 AM on 02/15/2011

This president is a con.......we have been conned. Obama is a fake. A classic case of bate and switch. He won't get my money or my vote again.

[Christy Jane Woodruff]

09:21 AM on 02/16/2011

That would be bait and switch.

[tuliehowller]

10:34 AM on 02/16/2011

Thank you......

[Janine547]

04:49 PM on 02/14/2011

After signing the bill extending the Bush tax cuts for two years the president has decided to increase Federal spending and double the size of the deficit and then claimed that the deal to extend the Bush tax cuts drove the deficit to $1.6 trillion. How irresponsible is that?

[The Art of Fart]

05:22 PM on 02/14/2011

That is why I left the country, because even if I try to succeed I will fail no matter what at living in that country. America was built on a system where the rich will always get richer and the poor will always be poor.

[tuliehowller]

08:57 AM on 02/15/2011

I don't blame you.........this country is being raped by the mega rich and Obama is their front man.

[michael26]

06:21 PM on 02/14/2011

Obama understands math just like every other politician. Nothing adds up.

[The Art of Fart]

04:05 PM on 02/14/2011

When I was in America I had over $150,000 in school loan debt. They tried to get me to pay $1100 a month to pay it back and my job didn't pay me but $700 a month. I had no money to buy food and I couldn't get food stamps because they said I made to much money and I also couldn't afford a place to live. What I did was I left the country after that and moved to Russia, now I am making over 200k a year working a part time job and I am the happiest man alive now.

[poomplet]

04:21 PM on 02/14/2011

GREAT....now how 'bout paying back that loan you SWORE TO PAY?

otherwise, 'effoff, and I hope you try to come back to visit & get thrown in prison.

[The Art of Fart]

04:22 PM on 02/14/2011

lol the tax payers of America can pay it off. I have Russian citizenship now so I am good to go.

[MattB291]

03:41 PM on 02/14/2011

Reading posts on here, I realize just how much anti-intellectualism there is in this country. If the only measure of the value of an education, to ourselves or to society, is how much you can earn with it, then we truly are another rung down the ladder to barbarism. Even the ancient Greeks gave patronage to their academics. Apparently we need drones to shoot Afghan villagers more than we need academia.

We have lost all reason.

[poomplet]

04:29 PM on 02/14/2011

Not at all...I and others are all in favor of intellectual pursuits & pure academia.

As long as those pursuits don't cost society ONE DIME, and that universities are not subsidizing them one iota with tuition funding disproportionate to the number of students involved.

What I mean is, if there are 1000 students paying $10,000 per year, and 5 of them choose to study Renaissance Poetry and 100 choose engineering....the engineering dept/professors must be given 20x as much $$ as the renaissance poetry dept.

Otherwise, the engineering students are paying for their degrees. Of course, that logic is NEVER used in academia, which is why tuitions are so high & so many people take too many student loans.

[kofixg]

05:36 PM on 02/14/2011

I got a graduate degree in poetry. I lived with engineering students as an undergrad. None had debt (or weren't american in the first place). The system is already set up that way. But this society needs to acknowledge that not every single person on the planet needs to be an engineer. I shouldn't have gone to college. I should have just laid down in the street and died 20 years ago b/c i already knew i had nothing to look forward to as a non-engineer.

[MattB291]

01:26 AM on 02/16/2011

You are making my point.

If you favor academia, and if you agree that the advantage to society from it is not monetary, then (unless you think liberal arts professors can just stop eating) you are tacitly agreeing that it must be supported by society. If society is unwilling to invest in these things, then they cannot exist. And I don't know what school you went/go to, but the humanities and liberal arts departments are almost always sucking hind teat, teaching in the oldest crappiest buildings on campus so the school can buy some million dollar piece of lab equipment for the hard science labs. It costs way more to train an engineer or a chemist than a sociologist or a historian.

[brakkattakz]

03:31 PM on 02/14/2011

I am an engineering PhD student and I dont know a single other graduate science or engineering student that has ever had to take out a loan. Nearly all schools provide graduate assistant tuition waivers of some sort and everyone gets a teaching or research assistantship. So many are available that half of our students come from China and India! If you have to take out a loan for graduate school, you are probably in law school or business or something where there are far more students than spots available (allowing schools to charge an arm and a leg). And while I may feel sorry for those people who are too lazy to apply themselves to a scientific discipline, they're plight certainly wont prevent the future scientists of the US from living their 'Sputnik' moment.

[Lauramae]

03:33 PM on 02/14/2011

Nice judgment there, skippy.

[123Fergables]

04:23 PM on 02/14/2011

You've obviously never known someone who was in graduate school for business or law. Lazy? Please. And it's "their plight", not "they're". Trying applying your hard-working self to a few refresher courses in basic grammar. Lastly, have fun designing the next generation of port o potties, and try to gain a wider perspective, possibly one that allows you to look past the chip on your shoulder.

[Michael Garvin]

01:01 AM on 02/15/2011

trying applying!

this is great keep it up fellows

[bkerensa]

02:47 PM on 02/14/2011

The american dream is going down the toilet now that the poor will become far worse off and students will drop out due to changes in education funding.

Sadly!

[poomplet]

02:44 PM on 02/14/2011

If we want to slash the cost of graduate education, we need to stop what I refer to as the 'Academic CircleJirk".

What that means is, almost every college/university offers scads of phd programs in fields where the only career option is to become a professor a college/university, where you teach students in one of scads of phd programs.

Academics spawning academics, who can only earn a living spawning more academics...with precious few ever breaking out of this bubble to offer anything of tangible value to our society.

Think of all the hundreds of billions spent on this cycle!! Think of how large a chunk of a university's budget it chews up.

Sorry, this Liberal Arts grad is sad to inform you that society can no longer afford the luxury of offering Liberal Arts degrees/educations...ESPECIALLY at the graduate level.

[poomplet]

03:33 PM on 02/14/2011

On a whim, I looked up GRADUATE degrees offered at U of Iowa. Many 'real', important fields are offered...but so are:
* African American World Studies (MA)
* American Studies (MA or PhD)
* Anthropolo­gy (MA or PhD)
* Art (MA or MFA)
* Art History (MA or PhD)
* Asian Civilizati­on (MA)
* Classics (MA or PhD)
* Communicat­ion Studies (MA or PhD)
* Comparativ­e Literature (MA or PhD)
* Comparativ­e Literature­/Translati­on (MFA)
* Dance (MFA)
* English
o Creative Writing (MFA)
o Literary Studies (MA or PhD)
o Nonfiction Writing (MFA)
* Film & Video Production (MFA)
* Film Studies (MA or PhD)
* French & Francophon­e World Studies (MA or PhD)
* Geography (MA or PhD)
* German (MA or PhD)
* Greek (MA)
* History (MA or PhD)
* Internatio­nal Studies (MA)
* Latin (MA)
* Leisure Studies (MA) [seriously, a GRADUATE degree in 'Leisure Studies'?]
* Linguistic­s (MA or PhD)
* Music (MA, MFA, DMA or PhD)
* Music Education (MA or PhD)
* Philosophy (MA or PhD)
* Political Science (MA or PhD)
* Religious Studies (MA or PhD)
* Sociology (MA or PhD)
* Spanish (MA or PhD)

Should these fields exist? Do they have value? SURE...we DO need language/history/ teachers in High Schools. Their are TONS of relatively high-paying careers for writers, artists/illustrators/media arts & many others.

It's that we have WAAAY to much capacity...and capital...for graduate studies in these fields, at WAAAY too many institutions.

Want a BA or PhD in

[DrSnuggles]

05:03 PM on 02/14/2011

Leisure Studies is a business degree that specifically applies to the service/hosptality industry and while a PhD in the field might seem a little extreme a MA makes sense.

[retourner]

08:02 PM on 02/14/2011

so these are not "important"?
haha. thank you for the laugh.

[Lauramae]

03:34 PM on 02/14/2011

Apparently it is possible to go to college and to graduate school and learn absolutely nothing. The advantage of liberal arts would be to develop the capacity to think outside the box, rather than being trapped deeply within it.

[poomplet]

03:46 PM on 02/14/2011

I'm OK with liberal arts in UNDERGRADUATE studies. Many/most liberal arts students co-major in 'hard' stuff and/or go on to graduate studies in medicine, science/research, engineering and other fields.

I'm talking...OK, ranting...here about graduate studies in arcane, obscure and/or...well, I'll say it...UNIMPORTANT fields of study. And even then, my beef isn't with their existence, but the fact that so many colleges waste so much of their resources on them that it drives up tuitions for EVERYONE, and that people actually get tax-funded financial aid to pursue these graduate degrees.

[R2D2-51]

02:36 PM on 02/14/2011

Would you not do the same if you were rich and affluent? Of course you would unless you subscribe to a philosophy of life where material accumulation has little meaning in relation to providing to your own well-being as defined by your own set of values. I know one thing for relative certainty, and that is what ever set of philosophical values of life you came into the wilderness with after a summer of camping, hiking and fraternizing with nature and the world of other life systems in the Russian Wilderness and Trinity Alps area of the Klamath National Forest in Northern California, I can assure you, your life will change after you leave and go back from whence you came.

You will have become transformed by the spiritual and physical manifestations of reaching to the heavens finding a higher form of self-knowledge and the power of God’s love through the natural world

You will be changed forever no longer chained to the importance of material well-being but by what comes from your heart and soul.

In another time and in another place we used to call that the life of a flower child for those who lived in San Francisco many moons ago.

[R2D2-51]

02:31 PM on 02/14/2011

Perpetuating the paradigm of class struggle translated by those who have access to energize their full potential and realize their avocation for the benefit of our society and one’s self-fulfillment is no-less a crime against humanity.

And thus we see that those with the money, the “Capitalist Class (CC) are going to use it as an investment in their current and future security by ultimately dictating control of how this society is governed. Pretty simple human nature (Social Darwinism)

[retourner]

08:04 PM on 02/14/2011

social darwinism?
inaccurate.

[R2D2-51]

02:29 PM on 02/14/2011

Education should be paramount as the essential bedrock of a nation’s means to realize its full potential to serve humanity. The Human Race is at a crossroads for its very existence, and we have a duty and obligation to act in the name of human dignity and the survival of this planets life-systems to put in place people who share our love of humanity and the necessity of equality for the nation to realize its greatness.

Perpetuating the paradigm of class struggle translated by those who have access to energize their full potential and realize their avocation for the benefit of our society and one’s self-fulfillment is no-less a crime against humanity.

This is not a world I no longer wish to live in and neither should you, if you care one wit for the future of humanity and the many declining life-systems of this planet which are under assault in the name of global capital accumulation and material wealth for those seeking and maintaining their affluence.

[poomplet]

03:59 PM on 02/14/2011

mmmmm, PEYOTE!!

How I long for the salad days of my youth!!

[mb526]

02:08 PM on 02/14/2011

So angry about this I couldn't type a really coherent paragraph.

[spoonbill1963]

02:15 PM on 02/14/2011

You must be one of those who think the government is one giant soup kitchen. You want to go to graduate school. Then you pay the freight...all of it.

[poomplet]

02:22 PM on 02/14/2011

Give her a break...it's not easy seeing your goal of a phD in "Ancient Phoenician Women's Studies" look more & more like an unattainable dream!

[WittyUsername]

02:30 PM on 02/14/2011

wow spoonbill, you really are just TRYING to get people all upset and pissed at grad students... it's becoming comical.

lets clear something up - no one here is saying people deserve a free graduate degree. I have 3 graduate degrees and i pay for all of them. Every month. I have so much debt I could have bought a YACHT with my loans and lived a life sailing around the world.

this story is about the compromise that is Obama's budget. The pres looked at all his options for more money and chose to screw over the most benign part of society. Grad students represent the future. He could have made up this $$ by cutting ONE planned Navy destroyer. Or suing BP over the Gulf Oil Disaster.

people ferquently say here that Obama needs to do what ordinary americans do when balancing their budgets - cut things. I may be an optimist, but under the typical "American Dream" scenario - when someone is spending more than they make here in the USA - they usually go out and try to better themselves so that they can earn a higher income. Grad students are trying this, and to add a few thousand in debt on top of someone already under crushing debt is to add insult to injury - whether that debt is caused by good intentions (schooling) or bad ones (gambling/credit cards/etc).

lets not TRY to screw people in debt until we really have to.

[mb526]

02:06 PM on 02/14/2011

Bullshit. In the current economy one of the few effective ways to gain an advantage is to pursue graduate education. However, that education is very expensive and even the potential earnings leave graduates with loans in debt for years. Now by piling on more debt on students, they are reducing their potential earners and spenders in the economy further after graduation. If you want to foster growth how bout limiting the people who can access grad programs by having higher qualifications for admissions rather than burdening everyone with more debt?