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TITLE V—PELL GRANT AND STUDENT LOAN PROGRAM CHANGES
Sec. 501. Federal Pell Grants.

This section provides $17 billion in mandatory funds over two years to help fill the funding gap
in the Federal Pell Grant program. This additional funding is offset by reductions through reforms to
the student loan program in sections 502 and 503.


Sec. 502. Termination of Authority to Make Interest Subsidized Loans to Graduate
and Professional Students.

This section eliminates the ability of graduate and professional students to take out subsidized
Stafford loans, beginning on July 1, 2012. This elimination does not apply to students enrolled in a
program leading up to a degree or certificate or students enrolled in a program necessary for a
teaching credential or certification where such credential or certification is required by the state.

Sec. 503. Termination of Direct Loan Repayment Incentives.

This section sunsets the Secretary of Education’s authority to provide incentives
for on-time repayment of students loans on July 1, 2012. This section also explicitly
prohibits the Secretary of Education from creating any incentives for on-time
repayment of student loans.

Sec. 504. Inapplicability of Title IV Negotiated Rulemaking and Master Calendar
Exception.

This section clarifies that the negotiated rulemaking requirement included in
title IV and the master calendar requirements to not apply to the changes made in
this Act.

lawgod wrote:I think not.
"necessary for a teaching credential or certification" I think the exception only applies to education degrees.

Eliminate the subsidized loan program for graduate students. Beginning July 1, 2012, the bill would eliminate the interest subsidy on subsidized student loans for almost all graduate students while a borrower is in school, in the post-school grace period, and during any authorized deferment period. (Certain post-baccalaureate students would still be eligible.) The current annual and cumulative loan limits for unsubsidized loans would be adjusted to permit students to borrow additional funds in the unsubsidized loan program. CBO projects that, over the 2012-2021 period, the provision would shift approximately $125 billion in loan volume from the subsidized to the unsubsidized loan program. Because borrowers would be responsible for the interest accrued on those loans while in school, CBO estimates that this provision would reduce direct spending by $8.2 billion over the 2012-2016 period and $18.1 billion over the 2012-2021 period.

pjo wrote:
This is seriously bullshit.

pjo wrote:Here's another article explaining it: http://money.cnn.com/2011/08/01/news/ec ... qus_thread

This is seriously bullshit.

voltage88 wrote:So would we have to pay the interest while in school? Or would we still qualify for an in-school deferment? I've taken unsubsidized Stafford loans out and the interest just accrues without having to make payment while in school. These articles make it seem like we have to pay the interest while in school. Does anyone know?

voltage88 wrote:I think the interest will just accrue and be added on to the principal when it goes into repayment. That's how the unsubsidized loans work now anyway.

duckmoney wrote:What's the deal with no incentives to repay loans on time? Does that affect anyone?

Oban wrote:How is that possible? To pay when you have no income? Loans to pay loans?

duckmoney wrote:What's the deal with no incentives to repay loans on time? Does that affect anyone?

bgdddymtty wrote:ITT we see a microcosm of the myopia of the debt ceiling debate, as law students worry about the effect of an extra $600 per year of interest on repayment of a six-figure debt.

fakemoney wrote:

bgdddymtty wrote:ITT we see a microcosm of the myopia of the debt ceiling debate, as law students worry about the effect of an extra $600 per year of interest on repayment of a six-figure debt.

haha. TITCR.

I mean, yeah, this isn't good -- but as regards most people's debt haul, this is like resting a pebble on top of a boulder.

albusdumbledore wrote:Yeah. I mean who wants to keep their money right?

romothesavior wrote:1) This really is a pebble on top of a boulder. Most people already take out some amount of unsubsidized loan money for law school, so this whole "How am I supposed to pay interest while I'm in school!?!?" thing is kinda silly.

2) Shared sacrifice. If people are going to lose jobs, benefits, etc. to get the debt under control, then it is only fair that we do too.

This sucks, it really does, but its not the end of the world.