Major changes to federal student loans and aid may cause undergraduates to make adjustments to their loan choices, but will have the greatest impact on graduate and professional students.
UA students graduating in the fall will not be able to use a 2012-2013 Federal Direct Loan to pay for summer expenses. In addition, students no longer can use fall federal aid to pay prior charges greater than $200, according to Bryan Scott, assistant director for student financial aid.
Furthermore, the 2011-2012 Federal Direct Loans must be accepted and disbursed before June 30 if students wish to receive loan discounts, according to the Office of Scholarships and Financial Aid website.
Graduate and professional students, however, will become ineligible to receive federal direct subsidized loans. Although the annual loan limit remains unchanged, these students will only be able to receive direct unsubsidized loans.
Direct subsidized loans do not charge interest for students as long as they are in school at least half-time and during grace periods and deferment periods, according to the Federal Student Aid website.
“I don’t think eliminating eligibility alone is greatly going to affect the decision to attend grad school for people,” said Andrew Estes, a second-year classics graduate student. “But it’s one more piece to this ever-increasing cost for people to pursue higher education.”
Another change that will affect graduate and professional students, along with other students, is the upcoming elimination of any repayment incentives to direct loan borrowers, Scott said.
These repayment incentives include a reduction in the interest rate or origination fee, which will affect graduate students especially because they normally take out more loans with higher interest rates than undergraduates, Scott said.
The Graduate and Professional Student Council tries to give constituents financial assistance by offering them travel grants and funds for certain projects. But this is only a small relief, said Edward Beck, the council’s chief of staff.
“Graduate students are the backbone of universities, especially research-form universities like the University of Arizona,” Beck said. “If the universities can’t recruit top-notch graduate students, then there goes the research and there goes the reputation of the universities.”
Some graduate students also stressed concerns about the rising cost of higher education as well as increasing amounts of debt. Alex Perry, a second-year public health graduate student, said when students plan to attend graduate or professional school, they plan to go into debt.
“You know you have to pay back loans with interest at some point in time, but now it’s like, ‘Oh, by the way, you have to pay even more back now,’” he said. “It becomes almost prohibitively expensive to be a student.”
