Arizona Students Nervous With Interest Rate Set to Double on Need-Based Loans

"Unless Congress acts before July 1, interest rates on subsidized student loans, for which students must demonstrate financial need, will rise from 3.4 percent to 6.8 percent," Cronkite News reports. "The interest rates on subsidized loans were set to double last year as well. Just before the deadline, Congress passed a one-year extension of the 3.4 percent interest rates. Megan McClean, director of policy and federal regulations with the National Association of Student Financial Aid Administrators, said that another one-year extension is unlikely. 'Last year, extending it for one additional year cost $1 billion, and I’m sure you know that that money is hard to come by in these particular times that we’re in,' she said. McClean said that Congress and President Barack Obama are looking for long-term solutions. In Obama’s fiscal 2014 budget, he called for student loan interest rates to be set each year based on the current market rate. 'I think from a broader standpoint … we need to find a long-term sustainable solution versus these quick fixes,' McClean said."

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