MILLEDGEVILLE — College students taking out new loans for the fall term will see interest rates double what they were in the spring.
Subsidized Stafford loans went from 3.4 percent interest to 6.8 percent interest as of July 1. The rate increase in the loans, which are available to undergraduates from low-income families, will impact more than 7 million students and increase the cost to the average student by $2,600, according to an Associated Press report.
The rates were set to double last July 1, but Congress voted June 29 to extend the rates for one more year.
Lawmakers promised to restore lower rates when they returned this week, both retroactively and before students start signing loan documents later this summer. For now, the rate stands at 6.8 percent, which is higher than most loans available from private lenders.
Democratic senators and the White House both predicted that a deal would be reached in Congress to bring the rates down again before students return to campus.
But if an agreement remains elusive, students could find themselves saddled with higher interest rates this year than last.
Local student Shelbi Whipple is already feeling the stress of the rate increase. A working mother, wife and college student at Georgia Military College, the 6.8 percent interest increase only adds more stress to her already stressful life.
For students like Whipple, the uncertainty of it all is cause for concern.
“Being a college student is already stressful, and knowing that the pay rate is going up is going to cause more people to default on their loans and skip out on school,” said Whipple.
Although students are stuck with the federal interest rate, all hope is not lost. They still have a few choices to make when it comes to student loans. According to an Associated Press report, students can choose to accept only the necessary parts of the federal loans when they receive their financial aid award letter in the spring. If students accept the entire loan, the extra cash will be charged at the 6.8 percent interest rate.