Friday, May 29

Federal loan rates to increase for next academic year

Starting next year, students will have to pay slightly more to take out federal loans for college.

Currently, undergraduates have to pay a 3.86 percent interest rate for their federal loans. That number will rise to 4.66 percent for the next academic year for loans taken out on or after July 1, Bloomberg reported this week.

Graduate student interest rates and parent loan interest rates will also rise.

Undergraduates who are on a 10-year repayment period will have to pay about $46 more to the government per year for each $10,000 borrowed, Bloomberg reported.

The increase comes because Congress tied student loans to the Treasury note last year, when student loans had lower interest rates because the yield on the Treasury note was lower.

U.S. Senator, Elizabeth Warren, D- Mass., introduced a proposal on Tuesday that would let student-loan borrowers with high interest rates refinance their debt at today’s rates.

Students across the country collectively owe between $902 billion and $1 trillion in student loan debt, according to American Student Assistance.

Compiled by Laura Boranian, Bruin contributor.

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