May 3, 2012
Student Loan Interest Rates
There has been a lot of news about student loan interest rates recently. Specifically, the Stafford Loan Rates, which are currently at 3.4%, are scheduled to increase to 6.8% on July 1. What does this mean for you?
In short, it seems both parties are in agreement to keep the rates as in for the next year (until elections are over). The disagreement is on how to pay for this during that period. The reality is that the government does not have additional costs to provide these low rates. The government is able to raise funds at a low fixed rate and should be able to pass these savings on to students. They just won’t make as much interest on the loans as they were expecting. This is a concern as the amount of debt they are carrying for student loans continues to increase.
What should be a greater concern to students is what will happen a year from July – after the elections. The bigger problem is the cost of education, which continues to rise at twice the rate of inflation. Contact your representatives and ask them to help lower tuition costs to lower the costs for all students.