Loss of Federal Loan Subsidy for Graduate Students
The Budget Control Act of 2011 was passed by Congress and signed into law in August 2011. This law removes subsidies on all graduate Federal Loans disbursed on or after July 1, 2012. (There is an exception for teacher credential programs which is not applicable to graduate business students.) This means that the option of a partial subsidy on the $20,500 Direct Loan will go away for the 2012-2013 academic year. No graduate business students will be offered the $8,500 subsidized loan after the 2011-2012 academic year. Additionally, the rebate on Federal Loan fees will go away. This means that the Direct Loan will have a 1% fee and the Grad PLUS loan will have a 4% fee.