Student loan interest rates to double July 1st - KTBS.com - Shreveport, LA News, Weather and Sports

Student loan interest rates to double July 1st

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College students that apply for subsidized student loans after July 1st will pay twice as much in interest as a loan taken out last year.

That's because Congress failed to come up with a deal before its 4th of July recess.

Interest rates will double, going from 3.4 percent to 6.8 percent.

That means on a loan of say $5,000 and a rate at 3.4 percent, a student would pay $170 dollars a year in interest.

With the new, higher rate a student would pay $340 a year just in interest.

Betty McCrary, financial aid director at Louisiana State University- Shreveport said Friday the real impact will not be felt until after the student graduates and starts to pay on the loans.

"To do some research on what their profession is going to be. Not to borrow anymore than they are going to make their first year out of school," said McCray. "That seems to be a manageable amount. They typically have a 10-year repayment on them and that gives you 10 years to pay them back. A tenth of your income goes towards your student loan."

There is still a chance that Congress can do something about this. If the legislatures make a deal after they come back from recess, it can lower rates retroactively. 

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