Debt Legislation Effects
We wanted to take this opportunity to make you aware that Congress recently passed and President Obama signed into law a debit ceiling legislation bill, taking drastic steps to address our nations rising debt. Included in the debt ceiling bill was a provision which eliminated subsidized interest on Federal Stafford Loans for graduate and professional students beginning with the 2012-2013 academic year.
A Subsidized Federal Stafford Loan is a low interest student loan where the federal government will pay the accruing interest for the borrower while the borrower is enrolled in school at least half-time and working on a degree or certificate. While the annual Stafford Loan maximum of $20,500 remains the same, starting in the fall 2012, graduate and professional students will no longer qualify for Subsidized Federal Stafford Loans. All of the $20,500 annual maximum for graduate and professional students will consist of Unsubsidized Federal Stafford Loans.
An Unsubsidized Federal Stafford Loan is a low interest loan where the borrower is responsible for the accruing interest while the borrower is enrolled in school at least half-time and working on a degree or certificate. Borrowers can choose to pay the accruing interest while they are in school or have the interest capitalized. If you choose to have the interest capitalized, you will not have to make payment on the interest while you are enrolled in school at least half-time and working on a degree, but the accrued interest will be added to the principal of the loan.
As always, if you have additional questions about your financial aid eligibility, feel free to contact the Financial Aid Office at 773.508.7704, or e-mail our office at firstname.lastname@example.org.