As part of the recent student loan overhaul, subsidized federal loans were eliminated for graduate students as of July 1. What does that mean? Before July 1, graduate (including law) students were allowed to borrow up to a certain amount (about $65,000) in subsidized loans, meaning that interest did not begin to accrue on those loans until after the student graduated. With the elimination of the subsidy, these loans will now begin to accrue interest as soon as they are dispersed.
Maybe it seems like this isn’t a big deal in the overall borrowing of law students. However, the Chronicle of Higher Education estimates that the subsidy for graduate students who borrowed the maximum subsidized loans ($65,000) saved them $207 PER MONTH in payments over a 10 year payoff period. That’s $24,000 more that graduate students will now be paying in interest. It’s important for students to consider the overall costs–including interest–when evaluating your educational investment.
Check out the article here: http://chronicle.com/article/Federal-Loan-Changes-May-Curb/132665/?cid=at&utm_source=at&utm_medium=en