Every day ticks closer to the next week’s debt ceiling deadline, a possible default of the US, that president Obama calls financial “Armageddon”, can be destructive for the country’s economy. If lawmakers miscarry to raise the ceiling by Tuesday, Treasury department will no longer have the ability to assure that it can pay the country’s bills. Though, it will be forbidden from borrowing more money without a debt ceiling growth. Possibly default would have a heap of negative effects for our country.
Debt Deal Would Hit Student Borrowers
Some subsidies on student loans may take a hit under the debt ceiling deal to save the country from default and reduce deficits by more than $2 trillion during a decade. Congress would discard a special federal loan for graduates, as a part of the savings to cut the deficits. These subsidized student loans do not charge any interest until half a year after graduation. Also, a special credit for all students who provide on-time payments on their cash advance loans over one year would be canceled. These changes would take place July 1, 2012.
Pell Grants Boost
Under the Congressional Budget Office, the savings received from the students’ pockets will total $21.6 billion during the next ten years. As for the qualified for the maximum sum of subsidized loans graduate students, it would add few thousand dollars while the student is still studying. The money saved from the student loan cuts would help to boost Pell grants for students with low income.
The Interest Accruing
Currently, graduate students may take in advance $20.500 per year, including $8.500 from subsidized loans whereas the student is still enrolled and for half a year afterward. Over the course of studies, graduates can accrue up to $138,500 from direct federal loans and $65,500 in subsidized loans.
