Graduate Students Hit Hard In Debt Deal

The debt deal reached by Congressional leaders and President Obama would keep the nation from defaulting on its loans, but it would make graduate school much more expensive for many graduate students.

From CNN Money:

As part of the savings to trim the deficits, Congress would scrap a special kind of federal loan for graduate students. So-called subsidized student loans don't charge students any interest on the principal of student loans until six months after students graduated.

In an email to The Huffington Post, Mark Kantrowitz of FinAid.org notes that "graduate students can defer repaying their federal student loans by capitalizing the interest. The debt deal merely changes the $8,500 in subsidized loans to unsubsidized."

Under the agreement, a special credit for all students who make 12 months of on-time loan payments would also be axed.

The cuts would save the government $21.6 billion over the next ten years.

Think Progress points out the poorest grad students would be unaffected by the changes proposed in the agreement.

The cost of the war in Afghanistan costs $27 billion over three months, according to Think Progress, which says "Americans are left to wonder which cost-saving measure would be more worthwhile."

Reuters reports that grad students can currently borrow as much as $20,500 a year in federal Stafford loans. That amount will be raised to make up for the extra money students will have to spend to cover the lost subsidies.

Flickr photo by Tulane Public Relations

Comments

[ellogovna]

01:06 AM on 08/04/2011

the push against education by the right-wing is very real and growing...

highly educated individuals tend to vote democrat

[southernreporter]

10:18 PM on 08/16/2011

Fallacious reasoning by the left-wing could be a serious and very real threat to post-secondary education. BTW, I get the biggest kick out of listening to my waiter gripe and moan about how his degree in the English Lit; sociology; psychology; or the humanities is being wasted on ungrateful customers. They don't call 'em B.S. degrees for nothin'

[Mzindira]

01:43 PM on 08/23/2011

All of the degrees that you mentioned are actually B.A. (bachelor of arts) degrees. You are a serious threat to educated and rational people everywhere. Sir, please read a book (and not one written by a talking head or "pundit"). That is all.

[ninasantamaria]

01:01 AM on 08/04/2011

I did two years of community college before transferring to the least expensive state college, which was in my city. I worked full-time throughout college, answering phones, serving burgers, making coffee, filing papers, hoping for the ever-elusive chance at a career track job. I paid all my expenses out-of-pocket (nothing lavish...books, room, bus pass, etc.) as living at home was not an option (abusive family). I pursued International Studies and became fluent in French. When I graduated, I had $25,000 in loans that I had taken out to pay tuition. I received no assistance from my family and because of their lower-middle class income, I also did not receive any need based scholarships. Though I applied for numerous merit based scholarships, I received only one, which funded a semester abroad. Yes, it was actually cheaper for me to study in Europe than it was to study at home. I spent the next four years working low-wage jobs in customer service, office administration, and even a year of AmeriCorps. I returned to school for a Master's in Urban Planning. I received a substantial fellowship which allowed me to attend a private out-of-state university, but I still had to take out loans to pay for living expenses. I have $45,000 in student loan debt and am now in my early 30s. My boyfriend and I have lived with his parents for the past year. I am still looking for work.

[veritas88]

09:37 PM on 08/03/2011

The rent is too damn high and grad school (for non PhD students) is too damn expensive.

[ultratrails2]

08:09 AM on 08/03/2011

A two year masters student who must take out these loans to pay and live now is taxed an extra $1657.50 over those two years... You may not want to call it a tax, but it is extra money being taken in by the government that wasn't before. And even though it may not seem like much, consider that most masters students who need to take these loans to better themselves and better America, are living in a net-loss income situation.

Why does this happen to Grad students? because unlike industry, Grad students can't hire lobbyists nor can they buy legislation.

[Cronous]

11:45 AM on 08/03/2011

Hardly, that is like saying that my interest on a loan is a tax. Interest is intended to offset inflation and the opportunity cost of investing the money somewhere else.

[ultratrails2]

08:08 PM on 08/03/2011

This loan is a loan from the government. Any interest they collect is Revenue. If I am to believe what the GOPTeaParty says, revenue is tax (A tax being money collected by the government from its citizens). Since 1965, there has been no interest on Guaranteed Subsidized Loans while the student stayed in school more than half-time. The house passed a measure to eliminate these Guaranteed Subsidized Loans in September in order to collect revenue from, not the rich but students. That measure was thankfully dead on arrival in the Senate.

It seems that the House GOPT's are clearly interested in closing what they consider to be financial loopholes, provided they aren't closed on their donors... They should remember that they serve the USA and so does the Guaranteed Student Loan Program. Maybe reading President Johnson's remarks at the signing of this legislation would remind them how they are jeopardizing the future of America's greatness.

http://www.lbjlib.utexas.edu/johnson/lbjforkids/edu_whca370-text.shtm

[SeptimusDSX]

07:35 AM on 08/03/2011

It has become increasingly difficult to find people who would go to graduate school, now this. The future looks bleak indeed.

[Cronous]

11:46 AM on 08/03/2011

That is not necessarily a bad thing. The last thing we need is even more useless education.

[ambreline]

12:36 PM on 08/03/2011

I'm sure you'll be changing your tune once you need a lawyer, surgery, or a root canal.

[ellogovna]

12:54 AM on 08/04/2011

there is no such thing as useless education

[officiallyforeign]

06:47 AM on 08/03/2011

Dear US Gov't,

Thanks for putting some of the burden of debt from these useless wars and extending the Bush (now Obama) tax cuts on me, a grad student. Also, I like how not long ago you gave billions to bail out wall street - but suddenly grad student loans are an issue. Well done. Your priorities are clearly in check. Nothing like arming the future leaders of tomorrow with even more debt.

You're all useless. And Obama, for God's sake - keep your "change"... it's costing me an arm and a leg.

Sincerely,
Broke

[Cronous]

11:47 AM on 08/03/2011

Actually most of the debt was generated by entitlements to the seniors and the poor.

[officiallyforeign]

10:14 PM on 08/03/2011

Actually, that's not true. At all. Not even close. Do yourself a favor. Stop being a sheep to fox news and do a little research on your own. We spend a fraction on social welfare compared to corporate welfare.

[armstrong st]

05:34 AM on 08/03/2011

Nice! It's great that finally there's such an option.

Steve from www.essaytask.com

[DemZNG]

01:58 AM on 08/03/2011

If you want to make some noise about this, please sign my petition. http://signon.org/sign/restore-funding-for-student

[officiallyforeign]

06:56 AM on 08/03/2011

I passed this around to some of my fellow grad-students.

[ABACADABRA RABBIT]

10:00 PM on 08/02/2011

DOH!~~~~~~~~

I was banking on the 12 month plan.

THANKS FOR CAVING OBAMA!~

.....pathetic mollusk.

[Brian Gilmer]

09:59 PM on 08/02/2011

I was a bit surprised to see the cut to the graduate student loan program in the House bill. What was odd was that it was one of the few specific spending cuts in the bill. In a federal budget that is $4 trillion how is it the low hanging fruit is to stop support for graduate and professional students? Given the shortage of doctors in general practice do to the cost of paying back student loans why make matters worse.

[gamigliuri]

08:39 PM on 08/02/2011

The TeaBags propogate the continued Dumbing Down of America. Congratulations, Party of No! You did it again! (said dripping with sarcasm) Shame. On. You. All. Don't worry we will vote you all out in 2012. This was a BIG wake up call for America!

[frank day]

08:34 PM on 08/02/2011

With the next Breath they will be blaming the poor economy

on a lack of highly educated workers.

Idiocracy describes our current Congress perfectly.

[ultratrails2]

06:03 PM on 08/02/2011

I thought this bill had "no new revenues" in it... I guess it was "no new revenues that affect the wealthy."

[kportguy1]

06:00 PM on 08/02/2011

......and the government thumbscrews get tighter and tighter.

[thstolbe]

05:20 PM on 08/02/2011

yoo hoo over here! do you childern go to grad school?isn't it true what the say about grad people?