Loan Changes for Graduate Students
This notification is intended to inform current and future Graduate Students of changes that will occur in Federal Financial Aid funding.
On Tuesday, August 2, 2011, President Obama signed into law the Budget Control Act of 2011. Under Title V Section 502, the bill specifies “TERMINATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.”
Beginning July 1, 2012, there will no longer be Subsidized Loans offered to Graduate and Professional level students. Graduate students will only be offered Unsubsidized loans with an interest rate of 6.8 percent, which will begin accruing upon disbursal of the loan.
The new law includes both the elimination of subsidized federal loans for graduate students, as well as the elimination of incentives for repaying loans on time for all students. Please know these changes will not affect earlier Direct Loans, or those taken out for Fall 2011 or Spring 2012, but are effective for loans disbursed on or after July 1, 2012. We encourage borrowers who will be taking out additional unsubsidized loans after July 1, 2012 to consider making optional interest payments while in school to reduce overall debt before graduation.
If you have any questions regarding this information, please contact your Financial Aid Counselor.