Congress has doubled the interest rates on student loans, thanks to political fighting and callous inaction. Until something is worked out, borrowers are not sure about what this means for their futures in terms of payments.
The good news is not all student loans are impacted. Only rates on new, subsidized federal Stafford loans doubled from 3.4 percent to 6.8 percent on July 1. Rates on existing subsidized Stafford loans will remain at 3.4 percent. Rates on new and existing unsubsidized Stafford loans will remain at 6.8 percent. Rates on federal PLUS loans will stay the same as well, at 7.9 percent.
On a 10-year repayment term, the monthly payment will increase by only about one-sixth, says Mark Kantrowitz, publisher of Edvisors.com, New borrowers won’t subsidized federal Stafford loans until the fall, so they will not see the increase until then — and the real impact on their wallets will come even later.
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