Starting today, many college students will see interest rates on their loans go up for the coming school year.
Congress was unable to reach an agreement before a July first deadline to keep the interest rates on federal Stafford loans from doubling. As a result, students taking out new loans will be doing so under an interest rate of up to 6.8 percent.
One Wisconsin Now Executive Director Scot Ross says the increase will have a dramatic effect on current students, by making it harder for many of them to afford college. Ross says it will also result in a rapid increase in the already $1.2 trillion in student loan debt currently held in the US.
While Congressional Democrats did make a push to extend the 3.4 percent cap in the final days before the Fourth of July recess, Ross says House Republicans held up a deal with a plan that he says would have increased student loan debt by more than $15.6 billion over the next decade. He says “that is not going in the right direction.”
AUDIO: Scot Ross, OWN (:13)
The increase is expected to impact nearly 159,000 students in Wisconsin. Ross says it could price many of them out of taking classes this fall, forcing them to put off pursuing “their piece of the American Dream by entering the middle class through higher education.”
