Student loan interest rates to set to double unless congress acts...
Students, Your Loan Interest Rate Is About to Double
By KAYLA WEBLEY | @kaylawebley | March 20, 2012 |
RICHARD DRURY / GETTY IMAGES
Prepare yourself: on July 1, as many as 8 million college students will see their interest rates on federally subsidized student loans double, from 3.4% to 6.8%. According to the U.S. Public Interest Research Group, that increase amounts to the average Stafford loan borrower’s paying $2,800 more over a standard 10-year repayment term for loans made after June 30.
It’s worse for those students who take out the most money. Those who borrow the maximum $23,000 in subsidized student loans will see their debt load upped by $5,000 over a 10-year repayment plan and $11,000 over a 20-year repayment plan.
(LIST: The Colleges with the Most — and Least — Student Debt)
With the deadline looming, college students last week delivered some 130,000 letters to Congress, urging legislators to keep the interest rate at 3.4%. Like many things in Washington this election year, the issue has become a partisan battle. President Obama and other Democrats have urged Congress to act to extend the low rate (Democrat Representative Joe Courtney of Connecticut has introduced legislation that would stop the rate hike), while Republicans favor allowing the rate to return to 6.8%. Even the cost estimates vary: Democrats predict that keeping the rate at 3.4% for one additional year would cost about $3 billion, while Republicans say it would cost nearly $7 billion. (Mark Kantrowitz of FinAid.org estimated the cost at $5.6 billion for one year.)
Read more: Student Loan Rates to Double in June, from 3.4% to 6.8% | Moneyland | TIME.com