Student loan interest rates hurt more than just student wallets
Fri, 28 Jun 2013 22:03:00 GMT —
Interest rates on new student loans are going to double on Monday, July 1, at least for a little while, since the senate plans to vote July 10 on a one-year extension of the current interest rates.
The interest rate will increase from 3.4% to 6.8% on all new, subsidized Stafford loans.
This could add an extra $2,600 to the average student's college loan.
And that already has some new students at Coastal Carolina University worried.
"Paying them off is definitely what i'm most worried about. It's getting a new job, and the first thing I'm gonna have to worry about is student loans, rather than getting my own place or something like that," Jamie Decker, a freshman at CCU said.
Gregory Thornburg, interim Vice President for CCU Enrollment Services, said those interest rates drive people's college decisions, and a higher rate could mean trouble for area schools.
"Cities the size of Columbia, the Raleigh-Durham area, Savannah, Georgia- They have such a larger population of students, so if a large percentage of the population decides to stay home, we actually, we suffer in the two colleges here because we have such a small residential base," Thornburg said.
He said there's a lot of speculation as to why interest rates on student loans are the way they are.
"The interest rate charged is speculated to be higher than what it really costs to run the program. So there are some experts who say that the government's actually making money on the student loan program. So instead of it being an aid program, it's really a profit-making program," Thornburg said.
But Thornburg said the price of a college degree outweighs not having one at all.
"The college education's too critical not to pursue it and if you have to borrow some student loan money, you know, just borrow as carefully and responsibly as possibly," Thornburg added.