As many of you likely know by now, an agreement has been reached on the debt ceiling debate. Present Obama signed the "Budget Control Act of 2011," shortly after its approval by the Senate this morning. The compromise measure, put simply, increases the debt ceiling in exchange for promises of more than $2 trillion in cuts over the next ten years.
As part of the bill, the price of an education will cost more for students who take out federal student loans. The measure includes a provision that scraps so-called subsidized student loans for graduate students. Currently, students do not have to pay interest on the principal of their loans until six months after they graduate and qualify for credit if they make their payments on time. Under the agreement, students will start accruing the interest rate payments (currently 6.8%) while still in school, but won't have to start making payments on the interest or principal until after they graduate. But, if they wait to pay it back, they could conceivably owe interest on the interest.
According to the Congressional Budget Office, the move will add more than $21 billion to government coffers over the next decade.
Part of the money from the cut will be used to help maintain the availability of Pell Grants. More than 8 million students qualify for the needs-based grants every year.
Some take issue with the Pell Grant program because they are only available to undergraduate students and max out at just $5,550 per year. For students at the University of Washington, that falls short of the average yearly tuition of $9,764. Graduate students at the UW will pay more than $12,000 in tuition in the coming school year.
As Reuters points out, graduate students can currently borrow just over $20,000 per year from the Stafford Loan program. Under the debt ceiling agreement, that amount will go up to make up the extra money students will have to spend once the subsidized monies dry up.
Irene Sanchez is pursuing a doctorate at the UW. She pointed out after the bill was signed that graduate students of color and working class students will be the hardest hit under the bill. Sanchez says it is especially important for under-represented and minority students to see others who look like themselves in roles that require graduate degrees - like professors, doctors and lawyers - so that they know such professions are open to them as well.
Chicanos make up only about 0.3 percent of all doctorates in the U.S.
The changes take effect July 1, 2012.