Student Loan Interest Rates Expected to Double in July
March 29, 2013 Leave a comment
Bad news just came out of the class of 2013, incoming college freshmen might end up paying $5,000 more for the same exact student loans than recent grads if Congress doesn’t stop interest rates from doubling.
“What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.”
In my own personal experience as a recent college grad, my interest rates range from 3.5 percent – 5.5 percent depending on the year. I complain enough about that. Having all of them at 6.8 percent doesn’t seem like a lot more, but it can really add up as the years go on. Two-Thirds of students graduate with loans exceeding $25,000 and one in ten owe more than $54,000. President Barack Obama is expected to release his budget proposal in the next couple of weeks, which will give us more information on what is actually going to happen.
“Having a deadline [July 2013] does help. It’s much easier to deal with one specific date,” Van Ostern said. “But if Congress can’t come together … interest rates are going to double. There tends to be a tendency for inaction.”