Its official: Student Loan Rates To Double on Monday.

rell826

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[h2]It's Official: Student Loan Rates Will Double Monday[/h2][h3]Can Monday's Increase in Student Loan Rates Be Stopped?[/h3][h4]By SHELBY BREMER, Credit.com[/h4]
June 29, 2013 —

More than 7 million students will see interest rates on their student loans double from 3.4 to 6.8 percent on Monday, after the failure of Congress to pass legislation to prevent the automatic rate hike that they successfully deferred for a year last summer.

Despite the introduction of several bills to serve as a solution, lawmakers will leave for the week-long July 4 recess without implementing any of them, letting the July 1 deadline pass. Any students taking or renewing federal subsidized Stafford loans after that deadline can expect to pay, for example, an additional $3,000 on a $23,000 loan paid off over 10 years.

House Republicans passed the Smarter Solutions for Students Act on May 23, a measure that ties student loan interest rates to market-based rates. This plan would have reset student loan rates every year depending on the rate on U.S. Treasuries, which Senate Democrats claimed was too uncertain and with a cap of 8.5 percent, could push rates even higher than 6.8 percent.

3 Little-Known Facts About Student Loan Debt

Mitchell Weiss, a student debt expert and contributor to Credit.com, has been following the issue closely.

"The increase impacts the subsidized Stafford rates, which will now double to 6.8% -- equal to that of the unsubsidized Stafford loans," Weiss says. "Although the population of subsidized borrowers is smaller and the House can certainly act to remedy the situation retroactively, I'm actually more concerned about the series of House and Senate proposals that would index all student loan interest to the wrong Treasury note while subjecting the ensuing rate to an unreasonably high mark-up that's intended to cover administrative costs that have yet to be vetted."

How Do Student Loans Impact Your Credit?

Other Plans for Student Loan Rates

President Obama called for a similar plan to the Smarter Solutions Act in his budget proposal in April, tying interest rates to yields on 10-year Treasuries, plus 0.93 percent for low-income students, 2.93 percent for other undergraduates, and 3.93 percent for graduate students and parent PLUS loans. Though both proposals promise lower interest linked to current market rates, many warn that families will pay more in the long run due to market fluctuations.

How to Negotiate Financial Aid With Your College

In contrast, Senators Kay Hagan (D-N.C.) and Jack Reed (D-R.I.) introduced an alternative that extends the current 3.4% rate for one year, offsetting this cost by closing tax loopholes on both inherited retirement funds and oil companies. A similar bill proposing a two-year delay failed under a Senate Republican filibuster earlier this month.

An additional, bipartisan deal introduced Thursday by Senators Joe Manchin (D-W.V.), Richard Burr (R-N.C.) and four others proposed setting interest rates at the Treasury 10-year note plus 1.85 percent. Under this plan, graduate loans would be market rates plus 3.4 percent, and parent PLUS interest at market rates plus 4.4 percent, with all loans at interest rates fixed for the life of the loan.

The Senate will vote upon reconvening on July 10, and can change student loan rates retroactively depending on their final agreement.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Copyright [emoji]169[/emoji] 2013 ABC News Internet Ventures


Our elected officials are horrible. If this isn't the message that this generation needs to go to the polls and get them out of there, nothing will.

Hard enough to pay them off as the job market currently can't bear the load to employ graduating/graduated students as jobs are outsourced, import foreign workers, etc. etc.
 
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rell826

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Although I haven't been as politically or economically in tune as I was when I was in school, I truly do believe that they are this stupid. They serve their own interests and those who are funding them. Who does this benefit? Even if I didn't have enough **** on my plate as it is, a likely rise in my monthly loan payments is the last thing I want right now. I've been a responsible loan payer since I've been required to pay back and have never once thought about deferring or defaulting and this is what happens.
 
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"...measure that ties student loan interest rates to market-based rates..." - which rates does this refer to? Rates by the Fed haven't been change and most likely will not until this fall or early next year, but even then it won't jump by like 3%. And even 10 year bonds, which have increased the most during the past few months, have gone up by maybe 1%. Someone fill me in!
 
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swear all these dumb clueless people still gonna stunt with their LOAN refund money.... lol stunt all you want that 6% aint no joke.... gotta get them college yambs somehow
 
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Gonna have to put in work for those scholarships now.

How sad.
already got one..... damn it sucks to be a dumb *** in HS.... people left and right are passing up free money and now have to deal with the 6% interest rate
 
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already got one..... damn it sucks to be a dumb *** in HS.... people left and right are passing up free money and now have to deal with the 6% interest rate
too much real life. Very few HS students take advantage of these scholarships. It's about having fun and stuff until you see the 6% on that damn load. Got you wishing you had smartened up. I know I do... :smh:
 
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too much real life. Very few HS students take advantage of these scholarships. It's about having fun and stuff until you see the 6% on that damn load. Got you wishing you had smartened up. I know I do...
bro i tell every senior/juniors i know in hs to get that ******g scholarship... and i be like you better sign up or ill whoop yo ***... idagf if u get it or not... apply
 
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too much real life. Very few HS students take advantage of these scholarships. It's about having fun and stuff until you see the 6% on that damn load. Got you wishing you had smartened up. I know I do... :smh:
bro i tell every senior/juniors i know in hs to get that ******g scholarship... and i be like you better sign up or ill whoop yo ***... idagf if u get it or not... apply
Just graduated HS and didn't even think about scholarships, :smh:

Regretting not filling everyone of those damn things out.
 
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This is the Universe telling me to stay out of school and just keep making money. Yea ok. :smokin

I was going to buy an expensive camera with those loans. :smh:
 
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Let's also remember that post-secondary school is a privilege, not a right. If you can't afford it, or cant afford the interest rates on loans then go to work and save money. Too many people feel entitled. There are A LOT of people who complain about student loans and refuse to get a job while attending school. TONS of people work and go to school, and those people don't complain as much.
 
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1,771
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Let's also remember that post-secondary school is a privilege, not a right. If you can't afford it, or cant afford the interest rates on loans then go to work and save money. Too many people feel entitled. There are A LOT of people who complain about student loans and refuse to get a job while attending school. TONS of people work and go to school, and those people don't complain as much.
because now a days you gotta get that degree if not you're just a bum who graduated high school looking only to make 7.25 an hour?? naw b
 
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