Illinois: Student Subsidized Loan Rates Double
"As of July 1, undergraduate students across the nation will pay twice as much for their new subsidized Stafford loans," The Alestle reports. "The previous interest rate of 3.4 percent jumped to 6.8 percent due to lawmakers’ failure to reach a bipartisan agreement. The higher interest rate will not affect the roughly $1 trillion in existing student debt. Congress’ Joint Economic Committee estimated the increase will cost the average undergraduate an additional $2,600. According to Sally Mullen, director of SIUE’s Financial Aid department, 4,962 SIUE students used subsidized loans last year and she is optimistic that lawmakers will have those students’ best interests in mind when they reconvene. 'The university is confident that Congress can reverse the decision and retroactively lower the rates,' Mullen said. 'And our students won’t be impacted.' According to a statement from the National Association of Student Financial Aid Administrators, the interest rate hike could impact an estimated 8 million students each year. 'We are disappointed that lawmakers were unable to find a bipartisan solution that would bring down interest rates for all federal student loan borrowers,' the NASFAA stated, 'despite the fact that the Obama administration and members of Congress have proposed similar solutions that would bring federal student loan interests down and align them with financial markets going forward.'”
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