Unless there’s literally an act of Congress, the interest rate for federally subsidized Stafford loans is set to double to 6.8 percent on July 1. Subsidized Stafford loans are income based, for low-to-moderate income students. I’ve been reading the media reports about this and I’m most upset.
If this isn’t changed, the higher interest rate – up from 3.4 – would impact students who get subsidized Stafford Loans after July 1. Yes, the next generation. Not every student can get a subsidized Stafford loan. You must be a low-to-moderate income student to be eligible. The last thing that a needy student needs is a higher interest rate.
The pending rate increase is because the part the College Cost Reduction and Access Act of 2007 that requires a lower interest rate is expiring.
Let’s hope that this election year politicians can see that increasing an interest rate on the most vulnerable of America’s upcoming class of young professionals is not a good idea.
Hopefully there are other ways to raise money than off the backs of college kids.
If you’re a college senior, please try to get scholarships and work study if you need help paying for school. Student loans are no fun and are a mess to pay back.