Debt ceiling bill impacts federal aid for students

Following the passage of the debt ceiling bill, some students looking for help to keep down college debt are counting their blessings while others are counting their bills.

As a part of the agreement, graduate students will no longer be able to get federally subsidized loans.

The Congressional Budget Office estimates this will increase costs for students by about 18 billion dollars over the next decade. Under the new deal the president was able, however, to maintain full funding for the Pell Grant program for undergraduate students for at least the next two years. That is believed to be worth 21 billion dollars over the next 10 years.

University of Cincinnati officials say nearly 30 percent of their main campus student body relies on some level of federal grant funding.

Sarah Herbstreit is one of those students. In addition to being a student worker, Herbstreit counts on the financial aid from her Pell Grant to get her through school.

"Honestly it's a huge part of how I'm paying for school," Herbstreit said. "My parents obviously aren't that financially stable so I depend on that."

While she can still depend on the Pell Grant as an undergrad, federal loans for graduate students are now becoming more expensive.

"Wow. And I want to go to graduate school, that's really nice," Herbstreit said sarcastically.

Caroline Miller in University Enrollment says Washington's final decision was less painful than some of the other options on the table.

"In large part we're relieved," she admitted.

One possibility had been immediate changes in eligibility that could have affected students like Herbstreit.

"Given the options that were under consideration this, at least for this year, was a blessing," Miller said.

Graduate students like Erica Russell, however, are not feeling so blessed. Interest on graduate loans will now start accruing while students are still in school instead of being subsidized by the government.

"In some ways I see that it makes sense, objectively," Miller admitted. "But it still hurts in the purse."

As a law student, she understands why undergrads were shielded from major funding cuts.

"That's a hard one," Miller said. "I mean, who wants to sit there and say to kids that haven't even had the privilege of a higher education that 'Hey, sorry [but] you can't go'. "

At the same time, she says increasing numbers of graduate students are also counting on federal aid.

"We use the [federal] Stafford loans just to live," Miller said. "We are not living extravagantly by any stretch of the imagination, so yeah, it's important."

The changes will not impact graduate student loans until July of 2012.

Copyright 2011 FOX19. All Rights Reserved.