Subsidized graduate school loans are cut
Published: Thursday, May 3, 2012
Updated: Thursday, May 3, 2012 13:05
Students with subsidized federal loans may be safe from the interest rate hike that is currently set to begin in July, but other student-aid programs will undergo changes that will have financial effects on college students.
In the Feb. 3 issue of the Maroon, it was reported that the interest rate for federal loans was going to double in July, from 3.4 percent to 6.8 percent. The Associated Press has recently reported that both President Obama and Republican presidential candidate Mitt Romney have come out against the rate increase, and congress has put forth plans to prevent the hike.
Other changes to student aid programs will be put into effect for the 2012-2013 school year. According to the Department of Education’s student aid website, Pell grants and graduate student loans will undergo major changes. Pell grants will now carry a 12 semester maximum, or the equivalent if you did not use your full award each year. Subsidized graduate student loans will be canceled altogether, though graduate and professional students will be eligible for unsubsidized federal loans.
For those who have direct subsidized loans, the interest rate might not double, but the six- month grace period will no longer exist. Currently, subsidized loans remain subsidized (meaning no interest accrues) for six-months after graduation. The interest during this period will be added to the capital owed on the loan, though payments will still not have to be made during this period.
J. Karin Curley can be reached at firstname.lastname@example.org