Grad students to face higher interest rates
Students entering graduate school who are awarded financial aid will get just that — plus interest — after July 2012, as no subsidized loans will be awarded under the new debt ceiling plan.
Through subsidized loans, graduate students receive loans with no interest while in school.
Unsubsidized loans, which will continue to be awarded, are charged interest from the moment they are issued until the loans have been paid.
The economic impact for students receiving subsidized versus unsubsidized loans could result in graduate students accruing thousands of dollars in interest over the duration of their studies. Interest on unsubsidized loans is also capitalized.
Some graduate students at the University of Houston are banking on alternative means to fund their education, but say they are willing to pay additional interest, if necessary, to finish their degrees.
Ben Porter said he will “make it work” as he completes his last year of graduate studies in social psychology. He’s working two jobs as as a statistician and the second as a teaching assistant on campus. As a TA, he works 20 hours weekly in exchange for the school covering his tuition.
He still has to pay school fees, which are about $600 per semester, he said he does not plan to take out student loans next year.
“It’s really sad because grad students make very little in terms of money,” Porter said.
“Essentially, it’s going to put us in a lot more debt. Undergrads will also have more debt.”
Upon completion of his degree, Porter hopes to gain employment in academia at a research university. As a social psychologist, he said he expects to earn a modest salary as he begins his career.
“We’re not medical doctors, we’re not lawyers,” he said. “We’re not going to get massive salaries when we graduate.”
Like many other colleges within the University, the Conrad H. Hilton College of Hotel and Restaurant Management has been, and will be assisting students who qualify through graduate assistantships, teaching assistantships, scholarships and fellowships.
“That will significantly help to get rid of the financial burden,” said Kijoon Back, Graduate Program Director & Associate Professor at the college.
He does not deal with financial aspects while advising students, Back said he has never had a student drop out of school from financial concerns.
International Student Tyson Weeks said he would take out a loan, subsidized or unsubsidized, if he had to in order to complete his graduate degree in hospitality management.
However, he does not have to do so because he and his family are paying for his degree out of pocket, he said.
Other students, including friends of Weeks, have had to take out loans and will be affected by the graduate student loan changes.
“You can’t really escape the ramifications of the economy,” Weeks said.
Porter said he does not think the government’s initiative that brought about loan changes were intended to burden graduate students.
“The whole reason this came about is that there’s only so much money,” he said.
“I don’t think that they could do anything to assist us that wouldn’t harm anyone else.”