Should Graduate and Professional Students be Eligible for Federally Subsidized Student Loans? (H.R. 2526)

What is H.R. 2526?

(Updated July 15, 2021)

This bill — known as the POST GRAD Act — would reinstate the ability of the Dept. of Education to make subsidized Federal Direct Stafford Loans to graduate and professional students. Such students have been ineligible for the subsidized Stafford loans since the Budget Control Act of 2011 was signed on August 5, 2011. The difference between Direct Subsidized Loans and Direct Unsubsidized Loans is that the federal government pays the interest on subsidized loans while a student’s enrolled at least half-time, during the six-month grace period after they leave school, and during deferment.

The bill’s full title is the Protecting Our Students by Terminating Graduate Rates that Add to Debt (POST GRAD) Act.

Argument in favor

Reinstating the eligibility of graduate and professional students for federally subsidized student loans would help more people develop their skills and contribute to the American economy.

Argument opposed

If graduate and professional students want to take out federal students loans they should have to be unsubsidized — taxpayers should only help foot the bill for undergraduate loans.

Impact

Graduate and professional students eligible for subsidized federal student loans; and the Dept. of Education.

Cost of H.R. 2526

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Judy Chu (D-CA) introduced this legislation to make graduate students eligible to receive federally subsidized student loans. Chu reintroduced this bill in the current Congress after introducing it during the previous Congress and it failed to gain traction:

“By adding thousands of dollars in interest payments over the life of a loan, the Budget Control Act added a severe disincentive to students seeking the higher degrees they need. This bill would fix that by treating graduate students like their undergraduate counterparts and once again making them eligible to receive Federal Direct Subsidized Loans. These loans do not accrue interest while the student is still in school, saving the student thousands of dollars over time… At a time when our country is facing a shortage of specialized workers in critical fields, we should be doing everything we can to encourage students to enter these fields, rather than creating additional barriers to higher education.”

This legislation has the support of 34 Democratic cosponsors in the House.

Media:

• Sponsoring Rep. Judy Chu (D-CA) Press Release (Previous Version)
  
• Association of American Medical Colleges (In Favor)
  
• American Psychological Association (In Favor)