Brief relief, long-term questions on student loans

About $1.2 billion of the $6 billion cost of the low-interest rate extension comes from a GOP plan to limit federal subsidies on Stafford loans for undergraduates to six years.

Congress might have averted a doubling of interest rates on millions of new federal student loans, but the fix is only for a year, leaving students on edge over whether they’ll face a similar increase next summer.

“It’s scary,” said Faith Nebergall, a student at Indiana University whose loans currently total upward of $20,000. “And it’s unfair to kind of be kept in the dark as to how much money we owe.”

Under an agreement passed June 29, interest rates on new subsidized Stafford loans will remain at 3.4 percent for another year. That’s estimated to save 7.4 million students about $1,000 each on the average loan, which is usually paid off over 10 or more years.…Read More

Students seek to stop loan interest rate hike

President Obama said keeping the rate low would help 7.4 million borrowers save on average $1,000 over the life of the loan.

Millions of college students could be in for a shock this summer when the interest rate on a popular federally subsidized student loan doubles unless Congress acts.

College students on March 13 delivered more than 130,000 letters to congressional leaders asking them to stop rates from increasing from 3.4 to 6.8 percent.

The rate hike affects new subsidized Stafford loans, which are issued to low and middle income undergraduates. They hope to raise enough awareness to get Congress to stop it.…Read More