The debt ceiling and student loans: How the deal could affect your education

Mortarboard with price tag

Steve Chiotakis: In just a few minutes the U.S. Senate will likely pass a debt ceiling deal that will avert a possible default. President Obama will then speak from the White House shortly after that. And we're getting more details about the compromise this morning. For once, savings will come at the expense of graduate students who are losing a subsidized loan program which doesn't charge them any interest until months after they graduate.

Pauline Abernathy is vice president at the Institute for College Access and Success, and she's with us now from Philadelphia. Good morning.

Pauline Abernathy: Good morning.

Chiotakis: What changes are we talking about here, and who's most affected in this?

Abernathy: Well, the agreement recognizes the critical role that Pell Grants play to economic opportunity, mobility and our nation's economic competitiveness. It provides additional funding for the Pell Grant program. It does this at no additional cost to tax payers by eliminating the in school interest subsidy for graduate students.

Chiotakis: How much are we talking about for the average grad student, here?

Abernathy: Well, it will vary based on the length of the program and the cost of the program, but for some graduate students it could mean thousands of dollars more.

Chiotakis: Even though it's going to cost more for the grad students, do you think it was the right decision to make sure that the pell program stayed intact?

Abernathy: Pell Grants have to be the priority. One can't make it to graduate school until one graduates from undergraduate college. Pell Grants are essential for doing that for more than nine million low- and moderate-income Americans.

Chiotakis: Pauline Abernathy, with the Institute for College Access and Success. Pauline, thanks.

Abernathy: My pleasure.

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