Here's something that has been drown out in the debt-ceiling debate and has just passed the House in the debt-ceiling bill. Subsidized Stafford loans for grad students (up to $8500 a year) will end effectively in July 2012, for a savings of $18.1 billion over 10 years.
The Budget Control Act of 2011 would end giving interest subsidized loans to graduate or professional students excluding those students enrolled in teaching credential or certification programs required by the state, while unsubsidized loans are still available. The Act would also give Pell Grants $13 billion in mandatory funds over two years to make up for the funding gap, but would give $20 billion total to the Pell Grant program. The elimination of subsidized loans for graduate students will save approximately $18.1 billion over 10 years for all three plans.
The proposals to eliminate interest subsidized Stafford loans is not new, as both the College Board’s student aid panel and President Obama himself in his 2012 budget request proposed ending the subsidized interest on graduate student loans, though both would have used that saving to fund Pell Grants.
http://thinkprogress.org/...
http://thehill.com/...
This means if you would have previously taken the full amount for subsidized Stafford loans of $65,000, with the subsidies gone, you will now pay $203 more per month in interest payments over a ten year period. The interest will be accruing immediately while you're in school.
This is effectively a tax raise on grad students who are barely scrapping by in this recession, while the rich continue to get their tax breaks!
The current generation of college grads, who already have the bad luck of graduating during a recession and with many weathering the recession in grad school, just got another shit sandwich from the leadership of both parties.
Remember also that the interest rates for Stafford loans are 6.8%, double the going rate for 30 year fixed mortgages on a second home and six times that of the Fed discount rate given to banks. And grad students more than any other group are responsible enough to pay off their student debt. So this isn't exactly "free money" for grad students.