Subsidized student loan interest rates double
Updated On: Jul 01 2013 07:11:27 PM CDT
On Monday, subsidized student loan interest rates doubled, leaving many parents and students upset and concerned.
Congress had the chance to prevent the increase from happening before lawmakers went on the Fourth of July break. The House passed the bill, but it never went anywhere in the Senate.
Financial aid leaders tell ABC 17 News if someone got the maximum amount of financial aid for just this coming school year, the extra interest will come to about $850 over ten years. But that's just for one year.
Financial aid leaders say the ones who usually get these subsidized loans are more in need of help.
Many students say they don't know how they're going to pay the money back.
“I can't imagine how I was going to pay for those loans in the first place, and now that they're doubling, it's almost like I’m losing hope, in a way,” University of Missouri student Shane Burton said.
Burton said the situation is scary because he has numerous loans. On top of that, he doesn't know how long it will take to find a job after college.
MU financial aid leaders said there are about 10,400 students receiving subsidized loans. The majority get them all four years. That means the rate increase will cost students, on average, an additional $3,500 in just extra interest.
“For the majority of students, they're really not going to know or feel that impact until they enter repayment because the subsidized loan, the government pays for the loan while they're in school, but it is something they see as part of that acceptance package,” MU Financial Aid Director Nick Prewett said.
Burton says he hopes Congress passes something soon to bring the interest rates back down.
“Going to school on the government's paycheck pretty much right now, so thank God for that. It’s just kind of unfortunate that they're going to expect more,” Burton said.
In Congress, the Senate is expected to take a vote next week on whether it wants to take on a bill to lower interest rates back to 3.4 percent for another year.
It's expected to have opposition, though. Experts say if Congress doesn't get something passed before it adjourns for its August recess, it will have significant impact on students throughout the country.
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