Explaining Which Students Will Pay More For Student Loans
a.mina / Flickr
Federal student loan rates will double on July 1 unless Congress strikes a deal to extend the lower rates.
Students enjoying a temporary reprieve in federal student loan rates know that the deal comes the an end July 1 — unless Congress can reach an agreement to extend the lower rates.
The Miami Herald has a nice rundown on who will see their rates jump to 6.8 percent from 3.4 percent and who won’t. The story also lays out the political challenges facing any Congressional deal.
The potential rate increase comes as students and families are increasingly finding college unaffordable, and the financial hits are coming from all directions: federal Pell grants can no longer be used for summer classes; state financial aid programs such as Florida’s Bright Futures scholarships have been scaled back; double-digit tuition increases have become the norm.
But not all undergraduates would be affected by the rate increase. Subsidized Stafford loans are awarded only to low-to-moderate income students, while unsubsidized loans (which anyone is eligible for) are already set at 6.8 percent, and so would not be affected by the July 1 deadline.
Anyone who took out a loan before July 1 — whether you’re still in school or have graduated — would also be unaffected, as student loan rates are fixed at the time you borrow.