Some Ohio University students will feel the pinch of federal cutbacks after a Congressional decision to nix subsidized loans for graduate students.
In a deal that raised the debt ceiling, the subsidized loan program will be cancelled to save $21.6 billion over the next 10 years.
“Does this have an impact for graduate students? Of course it does,” said Valerie Miller, associate director of scholarships and client services.
The subsidy paid for students’ interest on their loans until six months after graduation.
While the deal will eliminate subsidized loans for graduate students, they will still be able to borrow up to $20,500 a year from the government.
OU had just over 3,700 graduate students last spring; fall enrollment numbers are not yet available.
For additional savings, students will no longer be offered a special credit for paying off their loans on time for 12 consecutive months. The credit was previously offered to both undergraduate and graduate students.
A cash-back bonus between .5 and 1.5 percent on the loan was offered to students for paying on time, depending on when the loan was granted, Miller said.
Those currently enrolled in the program will not be affected for past loans; the changes will be in effect for loans dispersed after July 1, 2012, she said.
The federal Pell Grants offered to low-income students were saved from cuts because of the savings made on subsidies, Miller added.
Pell Grants award up to $5,500 to both undergraduate and graduate students.
“I think they just had to make some tough choices and decisions,” Miller said.
The income-based contingent repayment plan, which is much more flexible, was also saved as a result of the cuts, Miller said.
About 10 years ago, tuition and subsidies for higher education were a near 50-50 split, but this has since changed dramatically, said Becky Watts, chief of staff to OU President Roderick McDavis.
“The university clearly recognizes that puts an increased burden on students,” she said. “We will look at what is available here and look to expand those programs.”
There will be a focus on raising money in the capital campaign to help students pay for higher education, Watts said.
“One of the top priorities of that campaign is getting endowed scholarships. … We know that’s the model we need to follow,” Watts added. “It’s a new model for public universities that looks a lot like the old model for a private university.”
Miller said that the changes would place additional burdens on graduate students.
“I would hope that higher education will be a priority (in the future),” Miller said.
aw366209@ohiou.edu
