Graduate Student Aid
In recent years, federal support for graduate education has declined. In many instances, these benefit cuts have had an adverse impact on student debt.
Currently, graduate students may borrow Stafford Unsubsidized Loans and Graduate PLUS Loans. They are also eligible for income-driven repayment plans (see Student Loans issue brief) and loan forgiveness for public service after a specified number of years of repayment.
The Budget Control Act of 2011 (Public Law 112-28, Sec. 502) eliminated the in-school interest subsidy (ISIS) for graduate students, who must now pay or accrue interest on both their undergraduate and graduate loans while they are in graduate or professional school. The interest rate on unsubsidized loans for graduate students is higher than the rate for undergraduates. While graduate students have access to additional borrowing limits through Graduate PLUS loans, the interest rate and the fees on those loans are considerably higher than that for unsubsidized loans. The Revised Pay As You Earn (REPAYE), open to all Direct Loan borrowers, provides loan forgiveness for undergraduates after 20 years, and for borrowers with any graduate loans after 25 years.
The lastest Congressional proposal for graduate student aid under the Higher Education Act (HEA) reauthorization were in the College Affordability Act of 2019, passed by the House Education and Labor Committee. That proposal expands graduate education benefits by allowing students to apply unused Pell Grant eligibility for graduate education, reinstates the in-school interest subsidy for graduate loans, maintains the Graduate Assistance in Areas of National Need (GAANN) and Javits graduate education programs, and expands Master’s Degree programs at HBCUs to all types of minority-serving institutions. No further action has been taken.