As if the cost of college isn’t already expensive enough, it seems that some students who are in graduate programs might end up even taking on more student loan debt if they want to complete their studies. In the future, this could also result in more and more students exploring debt relief solutions as soon as they graduate.
This possibility comes in light of the last minute scramble among congressional leaders and the White House to raise the U.S. borrowing limit. And, under this decision, it seems that one of the proposed legislation pieces that would keep Pell grants for low income students may also end up financially hurting other students.
Under the bill, starting on July 1, 2010, there will not be interest subsidies on those loans for professional and graduate students. What this means is that instead of interest accruing six months after graduation, interest will now start to accrue while the students are still in school.
Specifically, this means that instead of the government paying the interest portion of the loan, that interest will just be tacked on to the overall amount that is owed.
And, on top of the interest subsidies being taken away on graduate and professional student loans, the legislation would also take away a rebate that students currently get for making their payments on time for an entire year.
Of course, for those students who are already in their graduate program, or planning on starting one in the next year, this change could end up seriously affecting them, as well as the families who are helping to pay for their son or daughter’s college education.
Source: Reuters, “Congress debt deal may hit some student borrowers,” Linda Stern, Aug. 2, 2011