From Inside Higher Ed:
http://www.insidehighered.com/news/2011/08/17/students_will_bear_brunt_of_changes_to_graduate_financial_aid
excerpt:
WASHINGTON -- For most advocates for student aid, the biggest casualty in the the debt ceiling compromise reached by President Obama and Congress last month represented the least bad option: a change that would make graduate students responsible for the interest that accrues on their loans while they’re in school but leaves Pell Grants and other financial aid programs untouched (for now)
But for graduate schools, the cut presents a challenge: how to help students and encourage enrollment as state and federal resources decline.
The move eliminates subsidized federal loans for graduate students -- loans, distributed by need, on which the government paid the interest that accrued while students were enrolled in school. The cuts will save the government about $18 billion over 10 years. The change won't reduce the amount that students can borrow, but it will shift about $125 billion from subsidized loans to unsubsidized loans.
The final decision to eliminate the loans is so recent that officials at many graduate schools said they haven’t determined what, if anything, they’ll be able to do to provide more aid to students when the cuts take effect in 2012. Still, the combination of declining state aid and possible cuts to federal research spending make it unlikely that they will be able to offer significantly larger stipends or grants to offset the added interest.
“Given our own limited budget situation, I can’t see how we’re going to be able to respond immediately,” said Patrick Osmer, vice provost and dean of the graduate school at Ohio State University and chairman of the Council of Graduate Schools. While Ohio State is still determining how students will be affected and what the university's response will be, “we’re just working through our budget constraints ourselves,” he said. “I think it’s just going to be something that people have to absorb.”...
Read the rest at the link above.
