Save our subsidized loans!
Graduate education thrives as one of the leading forces in furthering the economic viability of the future of our nation. To my utter dismay, the Administration’s FY 2012 budget seeks to eliminate interest-subsidized graduate student loans, which compromises both the affordability and accessibility of graduate education. I am writing to express my concerns and to urge that these policies be reconsidered. Interest-subsidized graduate student loans provide a critical bridge to higher education by allowing students to earn zero interest while enrolled in a graduate program. Without this subsidy, the extra interest on each $10,000 of unsubsidized loan debt will accrue close to $1911 over the course of a two-year program, and $4,094 over the course of a five-year program. These numbers, although seemingly low, can be detrimental to individual finances since most students incur exceedingly higher loan burdens, often exhausting the $8,500 subsidized yearly maximum. This change in loan subsidies will thereby constitute a significant source of additional debt. The program elimination is equal to an increase of 22-percent for a five-year degree, which compounds to an additional $17,400 over a standard repayment plan for the many students who opt for the loan maximum. Keeping the subsidy will significantly benefit low-income students, namely those with undergraduate loans to repay.
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Other programs such as Income Based Repayment are not substitutes for subsidized loans. At a time when the American economy is still fragile, restricting access to education by raising overall costs threatens to imperil our nation’s recovery. I ask that you stand with graduate academic and professional students across the country in opposing this change, and retaining the interest subsidy.