FYI: Subsidized Graduate Loans Cut from the Budget

[IRdreams]

Huffington Post discusses this here:

http://www.huffingtonpost.com/2011/08/01/graduate-students-debt-deal_n_915525.html

[runonsentence]

I was going to post on this, but you beat me to it.

(Thanks, Congress!)

[Business2Biology]

Thanks for sharing, IRdreams. You'd best get cracking on finishing up your PoliSci program because WE NEED YOU!

I really liked the comparison of total savings in eliminating the program = 3 months in Afghanistan.

[StephanieM]

Hey, who needs education *eyeroll*

[robot_hamster]

I heard about this today and I went searching for information on it. I guess I am confused. Does this apply to loans you took out as an undergrad? For example, say you took out subsidized loans during undergrad and then went on directly to graduate school after graduation. Right now, those loans stay in deferment. Would that mean that those loans would start accruing interest while you are in graduate school? Or does this only apply to new loans that you take out as a graduate student? Some people don't take out new student loans for grad school since they have funding.

[IRdreams]

Scuttlebutt is that it refers to new loans taken out specifically for graduate study. I've been told that it will not effect the fact that some of my undergrad loans are subsidized and in deferment. What I don't know is how this affects graduate loans made before the switch. My bet is that it does not impact these loans as when you sign a primsory note you are basically signing a contract.

[blackshirt]

I read the text of the budget deal (here) together with the Higher Education Act it modifies (here) and from what I can tell, this only affects loans taken out by graduate students after July 1, 2012. If I remember correctly, the exception is those pursuing graduate study in order to become teachers in public schools.

I don't like it either, but at least the money "saved" this way goes to federal Pell grants for undergrad? Mostly, anyway...

[Mal83]

I just got my stafford loans approved for Fall 2011/2012 and it's still the standard mix of subsidized and unsubsidized. So hopefully I can get through my two years without accruing even more debt than I would have without those changes...

[nescafe]

I hate that Congress has made such sweeping cuts to Education, and particularly Graduate education and research (see: Fulbright Hays DDRA, Title VI, and now subsidies for Graduate Education Loans). But I am wondering how Graduate Institutions will handle these changes? There was a day when graduate and professional students completed their degrees without having to take out loans, and frankly, it wasn't that long ago. The biggest reason for this was that Graduate Schools paid their TAs and Instructors a higher (albeit still quite modest) wage.

I used to wait tables for a living, where I made 2.30 an hour. At one point back in history, servers and waitstaff were entitled to minimum wage (at least 5.15 at the time) paid by their employers. Once tipping became a common and almost lucrative practice, however, the employment laws were rewritten allowing employers to pay their waitstaff 2.30 an hour, the assumption being that tips would make up the difference. Essentially, lawmakers shifted the burden of the servers' wages, placing them directly upon the consumer, rather than upon the employer.

Long story short, I wonder (and a lot of this is speculation) whether American universities have done the same thing. With costs of living increasing and greater and greater numbers of grad students coming in each year, stipends for TAs and Student Instructors have stagnated and stalled. In my dept (a large Research-Intensive Private School in New England), graduate student instructors are even replacing professors in some depts. The stipends are too small to offset cost of living, and our stipended Grad Students actually have to sign a document saying they will not pursue work outside of the university. In the end, these grad students must take out loans to make ends meet. Like the restaurant I worked in several years ago, these Universities seem to have shifted the burden of their payroll. That is, they've shifted it onto the students.

Now, I don't think and end to subsidized loans for these students is the way to reverse this problem. And I am similarly skeptical about whether this move by Congress will actually inspire Universities to reverse these externalization-of-costs measures. I am actually quite concerned that this legislation will accelerate the mentality that I've seen among some faculty--- the one which views Graduate Students as sources of cheap labor only and disregards the "education" aspect of the advanced degree. (Indeed, one of the ugliest things I've seen since beginning grad school some four years ago was a student who taught several very popular courses in my dept. This student was encouraged to keep teaching, even at the expense of his research, until his Financial Aid ran out and he'd maxed out his Loans. He was then dismissed with little discussion.)

But I wonder--- what is a grad student to do? Is there a way to hand back to the university, responsibility for its Graduate Student community? Just thinking out loud here...

[Eigen]

It's interesting... There's a parallel thread to this one on the CHE forums, with most of the posters there being moderately supportive of the measure, with the opinion that you should either (a) be supported or choose another school, or ( that you should be responsible for supporting your own debt at this point. Being as it's mostly faculty and admins, it's interesting to see the difference of opinion.

Edited August 7, 2011 by Eigen

[Herbie]

Sigh.

Sorry if this isn't a substantial post, but I'm just watching my interest add up for the next indeterminable amount of years.