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  1. #1
    CareerRuined is offline Newbie 510 points
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    Stafford Loans Being Cut


    First, read this article:
    Mark Kantrowitz: President O Proposes Cuts in Aid Programs to Preserve Pell Grant

    The new proposed budget for FY 2012 includes a lot of cuts - most notably, cutting certain aspects of both the Pell and the Stafford Loans. The president wishes to keep the Pell grants at $5,550, which is great, but he wants to reduce the number of awards given out per year. To be exact, O wants to cut $100 billion over a decade from Pell Grants and other higher education programs (Chicago Tribune, Feb. 13). This follows a recent Republican proposal that wanted to decrease the Pell grants by $845 (to $4,705 from $5,550).

    The budget proposal would also eliminate the subsidized interest benefit on low interest Stafford Loans which help medical students across the nation. This elimination significantly increases the debt burden of graduate and professional students; namely you guys. The interest rate is 6.8%. This means that losing the subsidized interest benefit will add $1,676 to each $8,500 loan balance by the time the student enters repayment, a 19.7% increase. To add insult to injury, the US Dept. of Education says that the subsidized interest benefit for graduate students is "poorly targeted" at financial need. An average debt burden of $160,000 isn't financial need? We are future providers drowning in debt.

    O's recent statements that Children being the Future ring hollow in light of these budget cuts.

    I guess there is some solace in his announcement - he wants to simplify the FAFSA application process by eliminating certain questions not available from the IRS. However, this proposal (a very similar one to it) fell flat with the Health Care Education and Reconciliation Act of 2010 (around March of last year). I doubt, though, that this outweighs the budgetary restraints outlined above on pre-med and medical students alike.

  2. #2
    dawrhino is offline Junior Member 511 points
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    I do not think that they will be cut - they will be modified - from what I read they want to decrease amount of subsidized portion but in my understanding we will have same amount but with unsubsidized - am I correct?

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