NASFAA Supports Lawmakers’ Continue Efforts to Restore Subsidized Federal Student Loans for Graduate Borrowers
By Hugh T. Ferguson, NASFAA Managing Editor
Lawmakers have formally reintroduced legislation to restore subsidized loan eligibility for individuals seeking a graduate degree.
The bill, Protecting Our Students by Terminating Graduate Rates that Add to Debt (POST GRAD) Act, is once again sponsored by Rep. Judy Chu (D-Calif.) and Sen. Alex Padilla (D-Calif.) and would once again make graduate students eligible to receive federal Direct Subsidized Loans, which was ended in 2011 by the Budget Control Act.
“As Republicans threaten to slash the Grad PLUS program entirely, we are taking a stand to make graduate school more affordable by reinstating subsidized federal student loans for graduate students so they don’t accrue interest while they are in school,” Padilla said. “We did this for decades, and now is the time to support our 21st century graduate workforce and expand educational opportunities for low-income communities.”
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.
Publication Date: 6/13/2025
David S | 6/13/2025 3:40:04 PM
Oops, some bad editing. Last sentence of my first paragraph should read:
So it's unclear to me how the Bennett Hypothesis - availability of aid leads directly to tuition increases - applies if federal aid is there *but not* if it's only private.
David S | 6/13/2025 3:17:08 PM
Tuition has increased before and since Grad PLUS existed, and to the best of my knowledge, there has not be an acceleration of tuition increases since Grad PLUS first came to be in 2007 (correct me if I have that date wrong, but it's at least close). And in addition to that, full COA loans existed before Grad PLUS, they just didn't come from the federal government. So it's unclear to me how the Bennett Hypothesis - availability of aid leads directly to tuition increases - applies if federal aid is there or if it's only private.
And do away with Grad PLUS, tuition will keep going up. This mythology that schools will reduce their tuition if resources like this go away will be rather easily disproved if this stays in this devastating bill. In fact, it might even have the reverse effect, because without sufficient sources of funding readily available, enrollment will go down, and being that at many schools enrollment revenue is what keeps the lights on, schools will have no choice to but to increase tuition to make up for the shortfall.
And in addition to all of that, many Grad PLUS borrowers need the money to pay their rent and buy groceries. I'm no economist, but I've never heard anyone accuse landlords of inflating rent or supermarkets of hiking up the price of food because of Grad PLUS loans.
Amy P | 6/13/2025 1:43:20 PM
Michael B, Grad PLUS loans are limited to the cost of attendance. Grad PLUS loans are high because some graduate programs are very expensive (law, medicine, vet school, etc). And I am not sure what you mean by "oversight by institutions". If the student meets the requirements schools can't stop students from borrowing (for Title IV loan program). Can they counsel them and discourage them from borrowing or borrowing less? Yes, but they can't stop them. Whether schools should be allow to refuse to lend to otherwise eligible students (at any level) is a fair question but it's not an option right now.
Claims to the contrary, schools actually have very little control over student once they leave - again, they can counsel and due to cohort default rate have an incentive to, but they cannot make students pay their loans.
Finally, the typical defaulter is a student who attended for a semester or two at the undergrad level and then dropped out. These students usually have balances less than $10,000. You hear more about the grad student with a mortgage-level loan balance because that makes for more exciting press, but they are not what is driving the "default crisis".
Michael B | 6/13/2025 11:14:13 AM
While efforts to make graduate education more affordable are welcome, any consideration of reinstating subsidized loans for graduate students must be preceded by serious reform of the Grad PLUS loan program. The current structure of Grad PLUS loans allows for virtually unlimited borrowing with limited oversight by institutions, which contributes to rising tuition and excessive debt burdens without sufficient accountability. Addressing the issues tied to Grad PLUS loan abuse should be the first step before expanding federal subsidies.
You must be logged in to comment on this page.