WASHINGTON (AP/WMOT) — Congressional inaction could end up costing college students an extra $5,000 on their new loans.
The rate for subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, just as millions of new college students start signing up for fall courses.
Lawmakers passed a bill postponing the rate increase last year, but Megan McClean of the Washington based National Association of Student Financial Aid Administrators says she’s not hearing any buzz on Capitol Hill about passing another extension.
“It is set into law that on July first that the interest rate for the subsidized Stafford Loans will increase to 6.8 and Congress has to act in order to change it. So right now that’s the law and that is what is scheduled to occur, and given that we haven’t seen any real movement yet, I think there’s a fair chance it could stay at that rate.”
If the higher rate does go into effect, it could cost students and additional $6 billion a year in interest.