Federal loans to be cut for graduate students

In an attempt to reduce the federal deficit, the U.S. Congress will cut back on the amount of money offered to some students seeking loans to pay for their education, USA Today reports.

Under the new debt-ceiling bill signed into law by President Barack Obama earlier this week, the cutback would primarily affect graduate students who get government-subsidized student loans. Individuals seeking advanced degrees would see interest rates on their loans start to accrue beginning July 2012. The program as it's presently constituted allows students to obtain a loan interest-free for the length of their time in school. Six months after they graduate, however, interest begins to add up.

In an interview with the paper, Tony Pals, spokesman for the National Association of Independent Colleges and Universities said he hopes the program will come back once the economy gets on a more solid footing.

With cutbacks in federal subsidies, more graduate students may be applying to private lenders for their student loans. However, if they have bad credit, they may not be able to secure one. A credit repair company may be able to solve this issue if a student's credit report has been tarnished by unfair or inaccurate information submitted to a credit bureau by an errant creditor.