Debt deal leaves grad students with new loan costs

Story from The Takeaway. Listen to audio above for full report.

This week’s debt ceiling deal may have pulled the U.S. back from default, but 1.2 million graduate students just got slapped with another bill.

About one third of all graduate students have a partial federal subsidy on their loan, so they don’t get charged interest while they’re studying. That will be abolished from July next year, as part of an agreement to reduce deficits by at least $2.1 trillion over a decade.

The cut in subsidies could mean thousands of dollars more in loan costs for about a third of the country’s 3.6 million graduate students.

Pauline Abernathy is the vice president for the Institute for College Access and Success, a non profit that attempts to make higher education more available and affordable. He told The Takeaway that, while costs to students will go up, “it’s important to keep in mind that there are, for federal loans, programs to ensure that you payments will always be manageable.”

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“The Takeaway” is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what’s ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH.