Thursday, July 5, 2012

Changes for grad student loans

Big changes for government-sponsored student loans became effective July 1.  Graduate students will no longer be eligible for federal subsidized loans that are taken out on or after this date.  This will be quite a shock for those who could demonstrate financial need and were eligible for lower interest rates and postponing interest payments until after graduation.  Students can still borrow up to $20500 per year but the interest rate will be 6.8%. 

Two obvious consequences: (1) Expect students to borrow less, whether they use the loans for school expenses or to upgrade their wheels.  (2) Some students will reconsider whether they should go to graduate school, which is definitely not good news for MBA programs. 


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  4. Ouch, the interest on student loan stated on this post is quite high. Will I be able to pay that after I graduate and get a job? Seems like the interest rate would be a big hindrance.

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