Student loan rates double - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Student loan rates double

(KFVS) -

College students everywhere who take out new loans for the fall term will see interest rates twice what they were in the spring.

This comes after congress couldn't agree on a compromise to avoid the rate hike by Monday's deadline.

The interest rate doubles Monday on subsidized Stafford loans only.

Rising from 3.4% to 6.8%, which will affect nearly 7 million students.

Now, it's estimated that this will cost a student on average over $26,000 more than what they already owe.

A $1,000 subsidized Stafford loan is part of a financial aid package, so it doesn't affect every dollar borrowed.

Southern Illinois University's Chancellor who says this isn't something to panic about, students just need to be smart when it comes to borrowing money.

"If you have to borrow, it is still a tremendous value, there is not interest that accumulates until the six months after you graduate, and the doubling of interest seems terrible, but if you put it all together it's only a small portion of your package."

Even more good news, it's important to remember that the effects are not immediate, majority of students already signed their loan documents for the fall semester.

The senate will another chance to vote again on July 10, which can change student loan rates depending on their final agreement.

Copyright 2013 KFVS. All rights reserved.

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