Legislation Seeking to Restore Subsidized Federal Student Loans for Graduate Borrower Reintroduced

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

Last month Rep. Judy Chu (D-Calif.) formally reintroduced the Protecting Our Students by Terminating Graduate Rates that Add to Debt (POST GRAD) Act, which would restore subsidized loan eligibility for individuals seeking a graduate degree.

Specifically, the bill would once again make graduate students eligible to receive federal Direct Subsidized Loans, which was ended in 2011 by the Budget Control Act.

“A lifetime of debt shouldn’t be the cost for obtaining a graduate degree,” Chu said in a press release. “So I’m reintroducing the POST GRAD Act to restore the availability of Federal Direct Subsidized Loans for graduate students and make higher education more attainable to everyone in America.”

NASFAA supports the legislation and has been advocating for graduate students to have eligibility for subsidized federal loans restored since the eligibility was eliminated in 2011 as a cost-saving measure.

The bill has been introduced several times in the past without passage. Stay tuned to Today’s News for additional coverage.

Publication Date: 11/6/2023

Ben R | 11/10/2023 9:57:35 AM

All this will do is shift the timing of the loan subsidy.

While we don’t call them “subsidized” on the front end, due to their high IDR uptake graduate loans are receiving the lion’s share of subsidies already. Their higher loan limits (or lack thereof in the case of PLUS) and the structure of IDR means most of the benefits of IDR goes to those with graduate degrees and generally the more you borrow, the more you benefit from IDR, especially those pursuing PSLF.

Therefore, reinstating the subsidized loan for graduate students would simply shift the timing of the subsidy with little change to the overall level of financial support. While they’d have a slightly lower balance at graduation, those needing IDR would still need IDR on the back end. It’s hard to imagine for example that someone who needs IDR for a $109,000 balance including $9000 in capitalized interest, would NOT need IDR if only the balance was just $100,000.

David S | 11/6/2023 11:2:43 AM

Considering how much pearl clutching we get from lawmakers and pundits about what a disproportionate amount of the total student loan debt is for graduate students, I sure hope they're now all going to support this bill (nice acronym, btw) enthusiastically. Graduate students are forced to the back of the line for every Title IV dollar if they even get to line up at all, and while the absence of loan subsidies alone isn't the entire problem, it certainly contributes.

Then for some suggestions for next steps after this, see https://www.nasfaa.org/gp_loan_limits.

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Legislation Seeking to Restore Subsidized Federal Student Loans for Graduate Borrower Reintroduced

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