When President Obama struck a deal with Republicans agreeing to $3 trillion in federal budget cuts, few anticipated how these savings might impact college students. Education is usually considered an investment, in not only an individual, but also in a nation’s future. It is not a wasteful government program for the chopping block. Regardless of the lack of wisdom in undercutting our future work force, reductions agreed to in the debt deal will strike deeply into the financial assistance the government usually provides to students. CNN Money has recently reported that college costs are pricing out the middle class, so budget cuts targeting education could not have come at a worse time. Here are the top six ways the debt deal might crush many college dreams by making it prohibitively expensive.
1. Subsidized Loans: Reduced in Availability and Scope
As part of the debt deal, graduate and professional students will no longer be able to apply for subsidized loans. The federal government will continue to assist college students with subsidized loans, meaning that it will foot the bill for interest payments on the loans while the undergraduate is studying. But graduate and professional students will be out of luck, now being fully responsible for all interest payments for the term of the loan. Finaid.org believes this might drive up the cost of post-collegiate education by up to 16%. Undergraduates might retain the ability to apply for subsidized loans, but as Congress looks to cut an additional $1.2 trillion by Thanksgiving as part of the deal, it is unclear that any social programs are safe.