Grad students are notorious for being broke. I know, I was one for several years. Even if you have a teaching assistantship (which gives you a little more than $1,250 a month, sometimes more depending on your school or graduate department), chances are you will have to take out student loans in order to make ends meet.
Free food will become your friend. Donating blood or plasma may become a source of income. Selling old textbooks on Amazon might look pretty good too. You might want to consider either living on campus in a shoe-box apartment or with roommates. Depending upon what school you’re attending, you may need a part-time job on top of everything else—especially if you have a family.
For many of the graduate students dependent upon student loans to set off part of the costs of their education, a special kind of loan, the federal subsidized loan makes up a good portion of the financial aid package. These loans are great, because the government pays the interest on them while you’re in school, and then for six months after you graduate. You don’t have to pay anything while in school, and instead you can use every penny of what you do have to live.
For students like me, these loans saved a lot of money. More so, while I was in my Ph.D. program, they made it so that I did not have to have a job on top of all my classes, teaching assistantship, reasearch assistantship and scholarly activities. I was a single parent in graduate school, so I depended upon those loans (and still would depend upon loans) to make up the difference after the financial aid package was granted.
Say Goodbye to Federal Subsidized Student Loans
All that stuff I said—shoe box apartment, blood plasma, etc. That’s true stuff. I knew people in graduate school, studying to become future nonprofit employees, future professors, future lawyers, future scientists and future doctors who had to sell books and blood plasma to make ends meet. And that’s the point. People who are studying to become people who will be at the forefront of technology, knowledge, medicine, law, politics, etc. are among the poorest in the country. There are graduate students on food stamps.
And guess what? Guess who has received the shaft again? Was it the people who pay their way through college with trust funds? Was it the wealthiest 10% who keep the other 90% of us in check? Nope! It was graduate students. The government did away with federal subsidized student loans, also known as the Graduate Stafford Loans. This means instead of the government paying the loans while you’re in school, you’ll be accumulating interest on those loans while you’re finishing your graduate program—and unless you’re making payments, those interest accumulations will add up.
Just How Much Money Are We Talking About?
This has been dismissed as being a small chunk of change compared with the average debt a graduate student takes on while in school. But is it really? Sure, killing the Stafford Subsidized Loans has cut $21 billion dollars and made that money available for another worthy cause—undergraduate students needing Pell grants. However, it is also estimated that it will cost students $18.1 billion over ten years. Ouch.
Each graduate student can take out up to $20,500. Typically, $8,500 is made up of the subsidized loans. While schools say that students finish MA programs in two years and Ph.D. programs in five years, the average student takes about four years to complete an MA and eight to ten years to complete a Ph.D. That’s after the bachelor’s degree. That means students can have anywhere from $41,000 to upwards of $138,500 (the government limit on loans, or $224,000 for certain students in specific programs) or more in student loans upon completion. And that’s not counting private loans or credit card debt.
Up to $65,500 of that can be from subsidized loans. Guess what, that’s a LOT of interest. Yes, one might argue that it’s only paid for the student on $8500 a year, but when you add that up and in with the rest of the loans…one can understand why in the film Reality Bites Janeane Garofalo says, “I’m going to be dodging my student loan officer for the rest of my life.” Each student will be paying interest on the full $20,500 compounded. Also realize that you’ll be paying about 1% in fees for your student loans.
For a student who takes out the maximum in loans over 6 years in a PhD program, the interest accrued will be $25,000 that the government would have paid. Some might say that it’s a small part of the some $60,000 all together in interest that would accrue over the time the student is in school.
What Are Students to Do?
This is a question I’m still trying to discover the answer to. On the one hand, I really want to go and complete the goals I had set out for myself when it comes to finishing my education. That means that it’s really tempting to go. At the same time, I I’m thinking that it would not make sense to go to a school I can’t get funding for. So that changes my initial list of MFA programs for creative writing—a list that originally included low residency programs that would have required I take out student loans.
Even with funding, it’s hard to imagine not needing loans to make grad school ends meet. So, it’s all really tentative, and it’s not clear-cut. The decision to go back to graduate school is a difficult one and many factors should be weighed. Has the impact of this debt ceiling decision affected your decision to go to or continue obtaining a graduate education?
- Direct Stafford Loans http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp
- Image courtesy of http://www.sxc.hu/photo/559613
- Liberto, J. (2011) “Students to Feel Pinch in Debt Deal.” CNN Money. http://money.cnn.com/2011/08/01/news/economy/debt_ceiling_students/index.htm
- Novack, J. (2011) “Debt Ceiling Plans Take Aim at Graduate Student Loans.” Forbes. http://www.forbes.com/sites/janetnovack/2011/07/27/debt-ceiling-plans-take-aim-at-graduate-student-loans/
- Scherer, M. (2011) “The Unelected Winners and Losers of the Debt-Limit Showdown” Time Swampland. http://swampland.time.com/2011/08/03/the-unelected-winners-and-losers-of-the-debt-limit-showdown/