Doubled Rates - What Does It Mean For You.
Beginning Monday morning, interest rates for new federal subsidized Stafford loans doubled from 3.4% to 6.8%. Unable to reach a bipartisan solution before their Independence Day holiday recess, Congress must now decide whether it has the political will to produce an elusive bipartisan compromise bill to return interest rates to 3.4% (or some rate lower than the present 6.8% and apply it retroactively to July 1st) or let the change stand and cost a "typical borrower" an additional $3,000 over the course of a standard 10-year repayment plan. While Congress still has time to retroactively lower interest rates before students begin classes in the fall, the clock ticks on and signed promissory notes for federal student loans at 6.8% would certainly complicate things.
Unsure how the rate change affects you? Rohit Chopra, Student Loan Ombudsman for the Consumer Financial Protection Bureau, explains.
