D.C. Defunds Aid to Students

Though S&P’s downgrade of the U.S. government’s credit rating was the most publicized effect of this summer’s federal debt ceiling battle, the compromise eventually reached in Washington held other consequences as well — including one which will directly affect New School students.

Early last month, in a bid to preserve federal aid for undergraduates, Congress eliminated a government subsidy for graduate students. The trade-off, a product of last-minute negotiations to end the impasse in Congress over raising the federal debt limit, was the result of congressional Republicans demanding cuts in discretionary spending. Faced with cuts to the Department of Education, congressional Democrats elected to continue full funding of undergraduate subsidies by eliminating the graduate subsidy.

The move protects benefits for undergraduates but threatens to negatively impact NSSR students, who already pay much more to attend the school than those at comparable universities.

As the Free Press reported in March, NSSR students already suffer from low levels of financial support. Only 17 percent of Ph.D. candidates at NSSR receive full funding from the university, compared to 100 percent of Ph.D. candidates at NYU and Columbia. The lack of support means students are dependent on loans and part-time jobs to make ends meet, often postponing the completion of their studies.

University Student Senate president Chris Crews, an attendee of the NSSR, decried the fact that the proposal was sold as a compromise to protect undergraduate students.

“It actually pits undergrads against grad students,” Crews said. “Graduate students are being made to pay for undergraduates, and that’s somehow deemed a solution.”

While Lang students may cheer the promise of continued funding for undergraduate studies, the legislation poses a significant challenge to the future of NSSR, long considered The New School’s flagship academic division. Under President Bob Kerrey, stipends for teaching fellows increased from $3,000 to $5,000, and stipends for teaching assistants increased from $3,000 to $3,750. Those raises have been effectively erased by the decision to end graduate subsidies.

Stafford Loans, issued through the Department of Education, can currently provide up to $65,000 of subsidized loans to graduate students over the course of a lifetime. Students who receive subsidized loans are exempt from paying interest while still in school, and after they graduate pay an interest rate of only 3.4 percent, compared to 6.8 percent for unsubsidized loans. After June 30, 2012, graduate students who apply for student loans will receive only unsubsidized loans and are subject to the higher interest rate immediately.

With much of the funding from the graduate subsidy being scavenged to fund other programs, any reinstatement of the graduate subsidy seems unlikely. According to the Congressional Budget Office, $17 billion of the $22 billion saved as a result of the elimination of the graduate subsidy will be redirected to cover the cost of Pell Grants.