Rates for federal student loans are on the verge of increasing. Existing loans are safe. But for new borrowers, your applications for federal student loans such as the parent PLUS loan are affected by the rising rates. For the latest on federal direct loans, NY Times has all the information you need to know.
Warning: Federal Student Loan Rates Are About to Rise
Borrowers can expect to pay more for federal student loans, beginning on July 1.
The federal government sets interest rates on student loans annually, based on a formula adopted in 2013.
The rate on new undergraduate Stafford loans, one of the most popular student loans, will rise to 4.45 percent, up from 3.76 percent this year.
The rise of the federal student loan rates seems very alarming, but things must be put in perspective. According to the NY Times, the rates for the upcoming year are still relatively low, considering the history of federal student loans. Still, new students and parents are advised to seek out all options for college funding available.
Congress will set EVEN HIGHER interest rates for federal student loans this summer.https://t.co/1SvbIuxsOX
— StudentDebtCrisis (@DebtCrisisOrg) June 13, 2017
It seems only recently that the rate for student loan debt was reported to be at an all-time high. Not unrelated is the increase in federal student loan rates. The jump from federal student loan rates to the country’s amount of student loan debt is crucial in understanding the situation of higher education in the country. Is the State making what is supposed to be a basic need such a high-priced commodity? Is it contradicting itself in its desire to produce more college-educated individuals by failing to make college education more accessible? Although the NY Times reports that these rates are still reasonable, students and parents alike must be on the look out. We have yet to hear of a drastically altering good news about the situation of student loans in the country.
What to Do Now
While federal student loans are a big part of getting that college education, it’s not the only choice. If there’s a takeaway from this piece of news, it’s knowing the kinds of loans and financial assistance available to you. There’s little to nothing we can do about the rising rates of federal student loans, but what we do have are more options for financing student loans. For instance, there are many private student loans available out there. While it’s an unspoken rule that they are the last resort, in time like this, they seem practical and called for. Plus, they’re not all bad. These programs are reasonable, attainable, and certainly help in filling the gaps that federal student loans cannot. Always exhaust your options and know what’s best for you.
Watch this video from The Humanist Report for more information on federal student loans rates:
Don’t be crippled by these rising rates. Here’s a guide on How to Pay Off Student Loans. What are your thoughts on the rise of federal student loan rates? Let us know in the comments below!
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