University Office of Student Financial Aid
On August 2, 2011, President Obama signed into law the Budget Control Act of 2011, which included provisions that affect the Federal Direct Student Loan program. The following changes will be effective on July 1, 2012:
- Graduate and Professional Students: The in-school interest subsidy will be eliminated on Federal Direct Stafford Loans for Graduate and Professional students. This will affect loans borrowed for the next academic year but will not affect Federal Direct funds borrowed previously. The annual maximum amount (of what was previously subsidized and unsubsidized) does not change, but interest will now accrue on the entire loan disbursement. Previously, the $8500 borrowed in Federal Direct Subsidized Stafford Loan had interest paid by the government while in-school and during the 6 month grace period. It is this subsidy that has been eliminated. As is currently the policy, students have the option of paying this interest while in school or defer until repayment.
- All students: Reduction or rebate of loan fees will no longer be available for Federal Direct Stafford and Federal Direct Graduate PLUS loans. Currently, the federal government is subsidizing a portion of the fees charged on these loans. Beginning with next academic year, the fee on the Federal Direct Stafford Loan will be 2% and the Federal Direct PLUS loan will be 4%. This is an increase in fees from the current .5% and 2.5% respectively charged this current year.
The Financial Aid Office will continue to offer debt management programs as well as individual debt counseling to assist you with these changes