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Paying for college is getting more expensive starting Monday, July 1st.
Some students are trying to figure out how they’re going to pay for education, now that the most popular federal loan is doubling its interest rate.
Jorge Piocuda is studying or his master’s degree at Kansas State University.
“By the time I get my Ph.D. I would say given this new increase, probably $100,000 in debt,” Piocuda says.
He’s one of about 8,400 students at K-State bracing for higher interest rates on their Subsidized Stafford loans.
“I feel like I’m going to be paying off my student loans until I’m 40,” says undergraduate student Tracey Evans.
The rate doubled to 6.8% because congress didn’t come up with a plan to keep it at 3.4%.
“It is prime time right now for students to be applying for student loans for the coming academic year,” says Director of Financial Assistance Larry Moeder.
Moeder says Subsidized Stafford loans are popular for students who need the most help paying for college, because the interest doesn’t kick in until after they graduate.
“Chances are, unless they land that wonderful top paying job, they probably are still going to struggle because they don’t have a family to fall back on for assistance,” he says.
Piocuda says while this could encourage students to earn better grades so they can get those high paying jobs, it could also deter them from college altogether.
“If I’m going to be in school for x amount of years and there’s going to be this high interest on my school loans, I’m not even going to take that financial burden and try something else,” says Piocuda.
Moeder has hope Congress will come up with a plan to lower the rate back down to 3.4%, but some student don’t.
“At this point I’m not sure if there is a whole lot because they haven’t intervened so far,” Evans says.
With at least two more years of school to earn his Ph.D., Piocuda says he’ll have to work two jobs to pay the extra interest.
The hike doesn’t affect students who have already graduated with Subsidized Stafford loans – it only applies to current students applying for loans this fall.
Lawmakers say they’ll try to come up with a way to lower the rate back down to 3.4% after the July 4th holiday.
If they don’t make a decision by the start of the fall semester, students will pay the 6.8% interest rate.