Student Loan Interest Rates Set to Double
As new high school graduates get ready to head to college this summer, student loan debt may be the last thing on their minds.
But for 7 million students, getting that degree is about to get even more expensive.
On Monday, the student loan interest rate is set to go from 3.4 percent to 6.8 percent. That could have a big impact on students all across the country, including those at Troy University.
Montrell Coleman is like a lot of other recent college graduates, struggling to pay back his student loans. He has a degree in theatre art from Alabama State University, but says he hasn’t found a job in his field. Right now he’s working a cafeteria and the debt is adding up.
“I may be going into default. I’ll have to pay them back or get a forbearance or something if you don’t have the money to pay them back right now,” he said.
He says that has him re-thinking some of his plans, like going back to school for a master’s degree.
“I probably will, because not only do you have to look at getting that secondary degree, you have to look at what’s in for me after I get it, because you have to worry about paying that money back,” said Coleman.
It’s up to Congress to pass a bill keeping interest rates where they are. That means university officials can’t do much except wait.
“Everybody’s going to be on watch to see what they’re going to decide,” said Angela Johnson, Financial Aid Director at Troy University.
Still, Johnson says there are steps you can take to keep from getting in trouble with your loans.
“Only borrowing the amount that they need and not to go crazy just because they got the money and they should stay in touch with their lenders,” she said.
Congress left Washington for the 4th of July holiday without voting on any measure that would prevent the increase. That means they will not have a chance to vote on anything that could stop it until after it’s already in effect. Democrats have promised to take up the issue again on July 10th.
The interest rate increase will only apply to new loans starting July 1st. Any loans taken out before that will not be affected.