Stafford student loan interest rates may double July 1st - WGEM.com: Quincy News, Weather, Sports, and Radio

Stafford student loan interest rates may double July 1st

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QUINCY, Ill. (WGEM) -

In just five days, college students are set to see their interest rates double on some student loans.

If congress doesn't take any action before July 1st, the interest rate on new federally subsidized Stafford loans will jump to 6.8%.

For second year John Wood Community College student Allie Zaerr, student loans have been a major factor in the decisions she's made in her life.

Zaerr says her father convinced her to transfer to a community college during her freshman year to save money.

"He made me sit down and figure out how much I was going to owe after I got out of college and how long it would take to pay it back," said Zaerr.

John Wood Community College President John Letts says that almost half of his students, like Zaerr, took out federal loans last year to pay for school.

He says if rates double it would put more of a burden on students.

"Student loan debt is now the number one debt in the country. It's passed credit card debt, housing debt, so it's going to affect a lot of people," said Letts.

Letts says if the rate increase does kick in, students may have to think about their career goals in a different way.

"Number one, think about what your income is going to be, think about how much it is going to cost you to prepare for that job that you want," said Letts.

Letts says students may also want to lessen their work load and take more time to finish school so they don't have to take out as many loans.

For Zaerr, she hopes rates don't double because thinking about her student loan debt is already a daunting thought.

"Knowing that your interest rate is going to go up and it's going to be even harder to pay back student loans, knowing that you're going to have more money. It's just kind of scary thinking about your future," said Letts.

 

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