Student Loan Rates Set to Double

By: Amanda Crawford Email
By: Amanda Crawford Email

Student loans are about to get a lot more expensive.

This summer, interest rates are set to double.

James Madison University has sent one newsletter warning students, and they're about to send another one.

Right now, federal interest rates are at three point four percent. On July first, that's going up to six point eight percent.

A financial aid officer at JMU says that is huge. Any student, upper classmen, incoming freshman or anyone taking out a federal student loan will pay.

They say a lot of student don't think about this because the bills don't come until after graduation.

The financial aid office says they always recommend loans be taken out as a last resort. They say it's expensive to borrow money, and this summer, it could get a lot more expensive.

"First, go back to that budget and really look at that budget," says Brad Barnett, with JMU's Financial Aid Office. "Second, is to be realistic. What can you afford to pay? Where can you afford to go? You know, school A might not be the best school if you just can't afford it. There's nothing wrong with going to school B or C. It's about setting realistic expectations"

JMU officials are already meeting with lawmakers in Washington D.C.

There are different pieces of legislation out there.

Congressmen Bruce Braley, from Iowa, and Congressman Joe Courtney, from Connecticut, both have bills on the table. They want to put a cap on the Stafford student loans. That means the interest rate would stay at three point four percent.

Congressman Bob Goodlatte's office says he's reviewing the legislation.

In 2007, Congress passed an Act that lowered the rates. That expires on July first, so unless they do something, the rates will go back up to six point eight percent.


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