Prepare yourself: on July 1, as many as 8 million college students will see their interest rates on federally subsidized student loans double, from 3.4% to 6.8%. According to the U.S. Public Interest Research Group, that increase amounts to the average Stafford loan borrower’s paying $2,800 more over a standard 10-year repayment term for loans made after June 30.

It’s worse for those students who take out the most money. Those who borrow the maximum $23,000 in subsidized student loans will see their debt load upped by $5,000 over a 10-year repayment plan and $11,000 over a 20-year repayment plan.  – Kayla Webley, TIME Magazine.

Fortunately this doesn’t affect those of us already carrying such loans and in repayment, though I never stop waiting for that shoe to drop.  I still remember far too well the interest on my supplemental loans being raised to 8% when Republicans controlled Congress under the Reagan administration.  It’s part of the reason my burden is so high now.  Fortunately I no longer have that kind of loan, thanks to consolidation.

The issue with the rate is, of course, budgetary.  Well, budgetary and political, as the article goes on to explain.

Continue reading →