"College students looking to get government loans to help pay for their education may want to think twice before signing on the dotted line after the large interest-rate hike took effect Monday, effectively doubling the rates on student loans nationwide," The Marietta Daily Journal reports. "Ron Day, director of Kennesaw State University’s Office of Student Financial Aid, said government-subsidized Stafford loans that required the student to pay an interest rate of 3.4 percent prior to Monday automatically increased to 6.8 percent for students securing new loans this week. 'Because of that increase, when a student starts paying back the loan, the interest will lock in at 6.8 percent, meaning they would pay about $4,000 to $5,000 more over the course of their college careers than under the previous rates,' Day said. 'Some people think that small change doesn’t sound like a great deal. But if it’s a higher interest rate, it will be much higher as far as the amount you’ll have to pay back.' Day, who also serves as the chair of the National Association of Student Financial Aid Administrators, urged parents and students to contact Georgia’s two U.S. senators to get a new bill passed when the Senate reconvenes. Until then, Day said college students should be wary about taking out any new government loans for the fall semester. 'We always tell students to be careful, but they should be even more so now because of these higher interest rates,' he said. Day said most universities are willing to help students manage the additional costs, but students should do some of the legwork first. 'They should always look at the website of the school they are interested in first,' he said. 'On our (KSU) website, there is clear information on the differences between these loans. Check the website first, but if they still need to call us, please do. All state schools have people that are ready and willing to give advice on student loans.'”
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Publication Date: 7/2/2013