Stillwater News Press

OSU Update

August 3, 2011

UPDATE: Grad students will see a hit from federal debt deal

STILLWATER, Okla. — Some graduate students can expect to see changes in their financial aid packages following a federal bill that raises the nation’s debt ceiling while cutting federal spending over the next decade.

The deal eliminates federally-subsidized Federal Direct Stafford loans for graduate and professional students, as well as loan payment incentives, beginning July 1, 2012.

In the past, when a student borrowed under the Federal Direct Loan Program, the student was responsible for repaying the principal amount, while the federal government paid the interest. With the change outlined in the bill, graduate and professional students will be responsible for paying both the principal amount and the interest.

During the 2010-11 academic year, 1,647 Oklahoma State University students received federally-subsidized loans to cover the costs of enrollment in graduate programs and also in professional programs in OSU’s School of Veterinary Medicine.

Those students borrowed more than $11.8 million during the most recent academic year, said OSU Financial Aid Director Charles Bruce. Those loans carried an interest rate of 6.8 percent, bringing the subsidized amount to $805,529, Bruce said.

President Barack Obama signed the bill Tuesday, capping a lengthy legislative battle that threatened to prevent Congress from extending the nation’s borrowing authority, potentially throwing the federal government into default. The bill represents a compromise that raises the national debt ceiling while cutting more than $2 trillion from the federal budget over the next decade.

Federally-subsidized student loans have been a point of contention throughout the debt ceiling debate. Last month, House Majority Leader Eric Cantor, R-Va., suggested both undergraduate and graduate students be responsible for paying the interest on those loans.

Cantor’s recommendation wasn’t the first of its kind. In December, the National Commission on Fiscal Responsibility and Reform released a report titled “The Moment of Truth” that outlined a number of cost-saving measures and made recommendations for programs to cut.

In the report, the Obama-appointed commission proposed the elimination of all subsidies in federal student loan programs. The commission’s report says the elimination of those subsidies would save the federal government $5 billion in 2015 and $43 billion through 2020.

Click here for more on how Sen. Jim Inhofe, Sen. Tom Coburn and Rep. Frank Lucas voted on the measure.

1
Text Only | Photo Reprints
OSU Update
Buy & Share Photos
NewsPress e-Edition
NewsPress Specials
AP Video
Raw: More Than 100,000 Gather for Easter Sunday Raw: Greeks Celebrate Easter With "Rocket War" Police Question Captain, Crew on Ferry Disaster Raw: Orthodox Christians Observe Easter Rite Ceremony Marks 19th Anniversary of OKC Bombing Raw: Four French Journalists Freed From Syria Raw: Massive 7.2 Earthquake Rocks Mexico Captain of Sunken SKorean Ferry Arrested Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Pope Presides Over Good Friday Mass Raw: Space X Launches to Space Station Superheroes Descend on Capitol Mall Man Charged in Kansas City Highway Shootings Obama Awards Navy Football Trophy Anti-semitic Leaflets Posted in Eastern Ukraine Raw: Magnitude-7.2 Earthquake Shakes Mexico City Ceremony at MIT Remembers One of Boston's Finest Raw: Students Hurt in Colo. School Bus Crash Deadly Avalanche Sweeps Slopes of Mount Everest
Stocks
NDN Video
Jabari Parker's Top 5 Plays From Duke Career Kourtney Kardashian Is a Bikini Babe More Manpower Than Ever Expected At 4/20 Rally Debunk'd: Miley Cyrus AIDS, Cheeseburgers Cause Cancer, Military Warning Bill Previewing the NBA playoffs Raw: Orthodox Christians Observe Easter Rite My name is Cocaine Raw: Space X Launches to Space Station Lohan Gets Candid About Her Sex List The 2014 New York Auto Show Meet Johnny Manziel's New Girlfriend Chelsea Clinton Announces Pregnancy Funny: Celebrating Easter with Martha Stewart and Friends Man Accuses 'X-Men' Director Bryan Singer of Sexually Abusing Him As a Teenager Man hit with $525 federal fine after he doesn't pay for soda refill Lea Michele & Naya Rivera Feuding? Jabari Parker declares for the NBA draft Singing Nun Belts Out Cyndi Lauper New West, Texas Explosion Video Swim Daily, Throwback Thursday
Must Read