Graduate students no longer able to get subsidized loans this fall
Graduate students will no longer be able to take out subsidized loans for the fall semester, when a federal statute signed into law by President Barack Obama goes into effect.
The Budget Control Act of 2011, Pub.L. 112-25, S. 365, mandates that all loans taken out by graduate students must be unsubsidized, including students enrolled in law and medical school.
Caps for subsidized and unsubsidized loans for undergraduates haven’t changed yet at OU, but future changes will be made for those in graduate school, said Bradley Burnett, director of OU Financial Aid Services.
Currently, the maximum amount of unsubsidized loans for dependent graduate students is $20,500 and $29,000 for independent graduate students.
Beginning in fall 2012, the maximum amount of unsubsidized loans will increase to $29,000 for dependent graduate students and $31,000 for independent graduate students, Burnett said.
This is primarily done to balance out the difference for the amount of subsidized loans no longer being granted to graduate students, he said.
The current interest rate of unsubsidized loans is 6.8 percent for both graduate and undergraduate students, but subsidized loans are at 3.4 percent for those undergrads who received theirs before June 2012, Burnett said.
Burnett said no new legislation has been made affecting undergraduate students.
“It’s an individual choice if one can afford to go to graduate school," he said. "The best thing to do is take your classes as quickly as possible and pay off the loans."
Monique Marcia, FAFSA representative, said the new guideline will take affect this upcoming 2012-13 school year.
"It’s a decision the U.S. Department of Education has made, most likely due to budgets, economy, etc.," Marcia said.
Marcia said she is unaware of any other changes related to student loans.
“At this time, it is as is; things can always change in the future, but we wouldn’t know," Marcia said.
Krystle Lane, human relations graduate student, was unaware of this new policy.
“It bothers me that they would make that decision," Lane said. "Earning a graduate degree is hard enough without the added cost that will come from having unsubsidized loans.”
Lane said she thinks the law will make it more difficult for lower-income students to complete advanced degrees.