The Budget Control Act of 2011 was passed by Congress and signed into law in August 2011. This law removes the interest subsidy on all graduate federal loans disbursed on or after July 1, 2012. This means that beginning with the 2012 - 2013 academic year, graduate students will only be eligible for the Unsubsidized Stafford Loan (up to $20,500 per academic year). Graduate students will not be eligible for the Subsidized Stafford Loan after the 2011 - 2012 academic year.
All Stafford Loans for 2011 - 2012 must be processed and disbursed prior to July 1, 2012 to ensure the Subsidized portion is retained. This includes loans for Summer Sessions of 2012.
Students enrolled only in a Teacher Credential Program will still be eligible for the Subsidized Stafford loan, as they are not considered to be "Graduate students" for financial aid purposes.
The aggregate loan limit for graduate and professional students remains unchanged at $138,500, not more than $65,500 of which may be in subsidized loans received prior to July 1, 2012.