What You Need To Know About Student Loan Rates Doubling - KMSP-TV

What You Need To Know About Student Loan Rates Doubling

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PHILADELPHIA -

Interest rates on student loans doubled Monday. But who does that include? Are everyone's rates going up?

For parents, thinking about how you and your children are going to pay for their college education is already stressful.

Now, students taking out new loans for the Fall term will see interest rates double unless Congress restores lower rates after the holiday.

Financial expert Dan Roccato was back on "Good Day Philadelphia" Tuesday morning to help us figure out what this really means.

Roccato said this only impacts new loans that are federally subsidized. The rate goes from 3.4 percent to 6.8 percent as of July 1.

An example of the impact on average student would be a $27,000 loan at 3.4 percent for 10 years means $265 per month or $4,887 total interest.

On a $27,000 loan at 6.8 percent for 10 years, that's $310 per month, meaning $10,287 total interest.

What can we do to offset the rising interest rates if they stick? Try to reduce costs, take credits at community college, live at home and seek scholarships, Roccato said.

For more of his insight on the situation and what you can do, watch the video clip above.

And here are some links that Roccato mentioned during the interview:

Collegeboard.org

PHEAA.org - State Grants

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