Student Loan Hike Canceled, for Now

Congress prevented the doubling of interest rates on the loans of millions of current and former college students, but the deal lasts for just a year, and students are already anxiously wondering whether they’ll face the same financial threat next summer.

—Posted by Alexander Reed Kelly

AP via The Washington Post:

Under the agreement, interest rates on new subsidized Stafford loans will remain at 3.4 percent. That’s estimated to save 7.4 million students about $1,000 each on the average loan, which is usually paid off over 10 or more years.

In the short run, that means students can breathe a sigh of relief this summer. A year from now, however, those rates are set to rise to 6.8 percent. That automatic increase was approved by Congress when lawmakers signed off on a series of scheduled rate reductions five years ago.

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Jagz Mario (CC BY-SA 2.0)