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.