TUSCALOOSA, Ala. (WIAT)- The July 1st deadline has arrived, and Congress did not strike a deal to keep student loan interest rates low. That means subsidized Stafford loan interest rates have now doubled from 3.4% to 6.8% and some students are wondering if a “higher” education is just referring to the cost.
Financial aid officials at the University of Alabama say they haven’t heard from any students who have decided against the loan program because of Monday’s hike.
Instead, Director Helen Allen is encouraging students to continue pursuing their goals and career aspirations.
Allen explains that in the 2012-2013 academic year around 10,000 students used the subsidized Stafford loan program.
The majority of those students only borrowed around $4,000 which is well under the maximum amount of $23,000 that could be borrowed.
Allen explains that even if students borrowed the maximum amount, most would only pay $3,000 in interest over a ten year period.
Congress’ Joint Economic Committee estimates the cost for most students across the country will be around $2,600.
Of course, some lawmakers have said they can fix the interest rates when they return after the July 4th holiday. The Senate has pledged to revisit the issue as early as next week.