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. 

As Congress considers the Higher Education Act (HEA) reauthorization, further attention will be given to graduate education.  For example, the College Affordability Act of 2019, passed by the House Education and Labor Committee, 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.

While the Senate has not yet acted on HEA reauthorization, Senator Lamar Alexander (R-TN), Chair of the Senate HELP Committee, proposed reducing annual borrowing limits for graduate students in early drafts.  Additionally, President Trump has proposed eliminating Public Service Loan Forgiveness, and replacing it with a revised Income Driven Repayment plan in all of his budget requests.


The federal government has provided support for graduate study through specific Department of Education grant programs and student loan provisions. As federal funding has gotten tighter, graduate students have been particularly hard-hit by cutbacks. Specifically, graduate students have lost several student aid benefits, and their cost of borrowing has increased. In addition, funding for grant programs supporting graduate education has seen little growth and, at times, has declined.

The Federal Role in Graduate Education

The main source of support provided by the Department of Education for graduate students is their eligibility for federal loans. A small amount of grant/fellowship funding through the Department is also available.

Grant/fellowship assistance is available for international and foreign language education and for study in areas of federally designated need (Graduate Assistance in Areas of National Need (GAANN)). GAANN funding has been steadily declining; its FY 2020 funding level of $23 million is lower than the amount provided in FY 2002. The president's FY 2021 budget request proposes to eliminate funding for GAANN all together. The Javits Fellowships for study of the arts and humanities, previously funded at about $10 million annually, were folded into GAANN in 2011 and have not been awarded since then.

Teacher Education Assistance for College and Higher Education (TEACH) Grants are also available to graduate students, but they convert to loans if the student does not teach for the required number of years in designated schools.

Other federal entities, such as the National Institutes for Health, the National Science Foundation, the National Aeronautics and Space Administration, and the Department of Defense, provide funding for graduate students pursuing advanced degrees, especially in the sciences.

Other support for graduate study is provided through special tax credits and employer-provided tuition reimbursements.

In the News

What You Can Do

Contact your Senators and Representatives and their staffs to:
  • Explain the importance of low-cost loans to the graduate students on your campus.
  • Support continuation of the in-school interest subsidy for undergraduates and its reinstatement for graduate students.
In preparing for your visit, review the financial aid of graduate students attending your institution.

NAICU Contact 

Stephanie Giesecke: