FORT MYERS, Fla.- Graduate students looking to take out subsidized student loans may soon have to dig deeper in their pockets to pay it off, as part of the nation's new debt deal.
"The loans are still deferred while the student is still in school. It's just the interest is going to accrue while they're in school...where currently, a graduate student with a subsidized loan, the government pays that interest while the student's in school," FGCU Associate Director of Financial Aid Brian Casey said Tuesday.
Last school year, about 1,200 of Florida Gulf Coast University's graduate students took out subsidized loans, totaling $10.2 million dollars in available interest-free financial aid.
But starting next July, grad students are looking at tacking on several thousand dollars to pay off the 6.8% interest rate accrued during school.
Undergraduate students' subsidized loans will go untouched for now, but repayment incentives for paying off loans on time will be nixed...a notion not sitting well with students.
"As a student you're trying to better yourself, going to school. School is expensive already as it is," FGCU student Karen Aguirre said Tuesday.
The federal government expects the changes to save $22 billion dollars over ten years. The majority of the savings will go toward funding Pell grants for the nation's neediest students. The rest will be allocated toward chipping away at the deficit.
"Unfortunately, it's going to mean the cost of borrowing for students is going to increase. We're already at a time where its a struggle for families to cover the costs of college," Casey said.
Florida Gulf Coast University reports 25% of their 12,000 students rely on loans to pay for tuition.