Due to the Budget Control Act, beginning fall 2012 there will no longer be subsidized loans available to graduate students. Graduate students will still be able to receive up to $20,500 annually in Stafford Loans, however only the unsubsidized loan will be offered. The unsubsidized loan will accrue interest while students are enrolled in school or in deferment. This does not mean students will have to begin repayment on their student loans, but the interest that accrues and goes unpaid while the student is in school or in deferment will be added to the principal loan amount and compounded once repayment actually begins. This act does not apply to any previously borrowed loans, it does not apply to undergraduate students enrolled in graduate courses, and it will only impact Stafford Loans taken out by students admitted and enrolled in a graduate program. Just to be clear, beginning fall 2012 all federal Stafford Loans will be unsubsidized for all graduate students.
More information about the Budget Control Act can be found at: http://www.nasfaa.org/Advocacy/Debt-Ceiling/Budget_Control_Act_of_2011.aspx.