During the ongoing debt ceiling and budget debates, the in-school subsidy for Stafford Loans has been targeted as a way to decrease federal expenditures. If you're a graduate or professional student with subsidized federal student loans, also known as a subsidized Stafford Loan, the government pays the interest on those loans while you're still in school. This subsidy is one of a number of items being considered for elimination in the FY 2012 budget by the House Appropriations Labor, Health and Human Services and Education Subcommittee.

If the subsidy is cut, the average PhD student who borrows $8,500/year while in school would see their total debt level increase by $9,497 by the time they leave school (as demonstrated in the chart below).

To To find out what you can do to act on this issue, keep reading.

The Tradeoff
Legislators are searching for ways to reign in the deficit. According to a report released by President Obama's Deficit Reduction Commission, elimination of this subsidy would save taxpayers $5 billion by 2015, and $43 billion through 2020. These savings, however, come at a significant long-term cost.

Eliminating the in-school interest subsidy for graduate-professional students makes post-graduate study more expensive by increasing students' debt level. Students, university administrators, advocates and others in the higher education community are worried that if post-graduate study is more expensive fewer students will choose to obtain advanced degrees, thereby restricting the supply of human capital needed to fuel long-term economic growth.

And that's the crux of the argument: short-term savings versus long-term growth.

What can you do to help save the in-school interest subsidy?

It's not too late to help save the in-school interest subsidy. There are two things that you can do today to act on this important issue:

Write Congress

You can use the NAGPS Legislative Action Center to write congress and encourage continued funding of the graduate and professional student in-school interest subsidy for Fiscal Year 2012.

Share Your Story

If you will be directly affected by the elimination of the in-school interest subsidy, or if the elimination would have affected your decision to pursue post-graduate study, send your story to Mary Winn, chair of the NAGPS Legislative Concerns Committee via the online testimonial form or at lcc@nagps.org. The more input NAGPS has from students, the more effective our advocacy efforts will be.