Although the debate over the national debt ceiling may have cooled in Washington, D.C., Iowa State University students and administrators are concerned about the debt deal’s changes to graduate student loans that could add thousands of dollars to student debt.the debt deal passed by Congress earlier this month includes removal of the federal subsidy on graduate student loans. While students will still have the choice to defer repayment on their loans until they graduate, next year loans will begin accruing interest from the time they are signed, rather than after students finish school.“my main concern is a lot of students know that their loans will still be deferred, but I don’t think they are thinking about the long term,” said Erica Smith, Graduate Student Senate president and a fourth-year graduate student. “A lot of them are just putting it off to the side saying, ‘my loans will still be deferred, it’s not a big deal,’ and I think they are not aware that they are losing that subsidized interest that the government had been paying.”Graduate students are currently allowed to borrow $20,500 each year, with a maximum of $8,500 coming in the form of subsidized loans. according to the U.S. Department of Education student loan website, the government pays more than $200 per month in interest for each student still in school who borrows the maximum lifetime amount of $65,500 in subsidized loans. the debt deal puts these interest payments on students’ shoulders.ISU Director of Financial Aid Roberta Johnson said preliminary calculations show ISU graduate students who graduate in two years could see an average of $1,125 in extra interest tacked on to their loan payments because of the debt ceiling bill. Doctoral students who take the maximum of seven years to graduate could see an additional $10,500, and veterinary medicine students will have an average of $5,000 in additional interest.Students in ISU’s College of Veterinary Medicine, who pay up to $41,000 per year in tuition and fees if they are from out of state, say they are worried about how much interest they will begin accruing.Amanda Kresge, a third-year veterinary student from Pennsylvania, said she’s already borrowed more than $150,000 in federal loans. “the interest is going to make my quarter-million-dollar debt when I get out of vet school that much worse,” she said. “the veterinary profession prepares you to be compensated fairly when you are working, but to have that much debt hanging over you when you start could really slow someone down.”Andrew Perrine, also a third-year vet student who has more than $100,00 in federal loans, said he was disappointed when he heard about the debt bill and said he “thought there would be other options.”“I know the government has to cut certain things to come up with the money to try to pay the federal debt,” he said, “but this seems like a pretty harsh statement to graduate and professional students, that this is the thing they are willing to cut.”With a second round of budget cuts looming before the end of 2011, additional cuts to higher education are expected. Linda Hagedorn, associate dean of the College of Human Sciences and a professor of education policy studies, said subsidized loans for undergraduates are the “biggest target” for the second round of cuts.“We are concerned knowing more and more students are requiring loans to complete their education,” she said, “and we’re also concerned knowing that as the money for subsidized loans goes down, we are going to see more and more students requiring private loans. We’re seeing the interest rates can be very high (on private loans).” In light of the cuts, experts say they are worried about equal access to higher education.“although our (enrollment) numbers are increasing,” Hagedorn said, “it’s who is coming back to school, who is going to college. I think there is a differential effect, and this is going to affect first-generation college students.”Johnson said she is worried that access to higher education could be compromised as more cuts are made, but said she is confident that students will continue to seek out graduate degrees to achieve their career goals.“I think for those students who are committed to ‘this is what I want to do,’ and the way to do that is to get a graduate degree, they will still attend,” Johnson said. “People who do not have a clear vision of what they want to do, they may reflect on that and decide differently.”Kresge said she wasn’t so sure.“Most of us have probably wanted to be veterinarians since we were very small,” she said. “Even if you want it with everything you have, and you can work as hard as you can, sometimes if you can’t afford it; it’s not an option.”While more deep cuts are expected, students at ISU are already looking to find ways to make their graduate degrees affordable.John Mazzello is working on a master’s degree in public administration at ISU and has financed his education through a combination of savings, financial awards and an assistantship.“I worked for seven years after getting my undergraduate degree so I had quite a bit of savings from that,” he said. “In addition, I worked as an AmeriCorp Vista volunteer, and as part of that service you get an education award that can be used either to pay off student loans or pay for future school work.”After working for more than a year as a full-time volunteer with AmeriCorp, Mazzello received $4,700 to help finance graduate school. he currently works as a teaching assistant in the undergraduate political science department, which covers 25 percent of his tuition and includes a living stipend.“It’s been relatively easy, I think, partially because I didn’t go back to school until I really could afford it,” he said. “I kind of waited until it was a good time to do it.”Smith, who also financed her graduate studies with an assistantship, said she’s already contacted the financial aid department and plans to use the fall semester to educate graduate students about the new law. she said she also hopes to work with other Iowa universities to build up support for graduate students at the state level.“Our main objective is to make graduate students aware,” Smith said. “I know (the law) doesn’t come into effect until next year, so we want to make sure graduate students have ample time to plan and also have the resources available to do that planning.”At ISU and other universities across the nation, financial aid experts have criticized the debt deal for targeting graduate students, but they have praised its protection of the Pell Grant program, a funding stream for the most financially needy undergraduates. ending the subsidy on graduate student loans helped preserve $17 billion for the Pell Grant program for 2012 and 2013.Hagedorn said the amount of money available through the Pell Grant is not sufficient now, with many students seeking out a second Pell Grant to finance summer school. Figures from the National Association of Student Financial Aid Administrators, a student aid advocacy group, show the Pell Grant program will face a $1.3 billion budget shortfall during the next biennium.By the numbers
• Total number of ISU graduate students with federal subsidized loans: 2010 graduating class: 1,195
• Average additional interest ISU graduate students now will incur: Graduate students: $1,125; Veterinary Medicine students: $5,000
• ISU graduate student teaching/research assistantships average award: 2009-2010: 2,324; $10,902Percent of graduate students with a research or teaching assistantship: 2009-2010: 46 percentHannah Furfaro can be reached at (515) 663-6918 or .