If you hadn't thought about Federal student loan help before, you may be thinking of it now. Starting in July, Federal Stafford loan interest rates will be doubling. That's right, your college tuition just got pricier if you are using one of these Federal loans to obtain your college diploma.
Only Stafford loans will see the interest hike. These subsidized loans are given on an 'as-needed' basis for undergraduates. The amount is determined by filing the Free Application for Federal Student Aid form. The free forms must be received within set guidelines which vary depending on state and college. While students are attending school, the interest does not accumulate. Once payments begin, the interest will accumulate. Look for student loan consolidation to help to lower payments if they are unaffordable.
Here is the good news! Loans which were issued before the July 1 date will have the 3.4% rate locked in for the life of the loan. Those loans issued after this date will be set to double at 6.8%. For those students who will be obtaining Stafford loans in the future will be looking at paying almost $2.00 in interest each day for a $10,000 loan.
This higher rate is not new to Stafford loans. It is actually the old rate before Congress began to slowly decrease the rate in 2007. It isn't that politicians want the increase to return. Last year they extended the 3.4% rate for an additional year while Democrats and Republicans worked on a solution. The extension will end the first of July and the parties have yet to agree on a solution to keep the rates low.
President Obama suggests that the loan rates should vary year to year depending on the rates of market conditions. The good side to this idea is that while the rates vary, there may be times when the rate drops even lower than the 3.4%. Who would be complaining during those years? Since the loan rates get locked for the life of the loan, these applicants will have inexpensive loans to pay off. The bad part falls on the years where the rates could possibly climb even higher than the now proposed rate of 6.8%.
There are some Democrats who would like to see the current rate extended another year or two in order to come up with a new law for federal student loan rates. House Republicans recently passed a bill similar to the President's proposal but it included both subsidized and unsubsidized loans. It also differed in that the rates would vary (with a Stafford cap at 8.5%) until graduation when they would then be locked in for life. Senate republications offer varied rates which lock in for life as the President's offer.
What does this mean to you the borrower? There is no finite result on the table as of yet, but if you fill out the Stafford application form now as well as find all other options that you may qualify for. Keep in mind that even with the proposed raised interest rates, federal loans are less expensive than private ones.
Professional student loan help companies work diligently every day to help relieve the burdens of student loan debt. Contact one today for a free consultation to make your student loan debt more affordable.
National Student Loan Relief helps individuals gain financial relief from their Federal Student Loans. Contact us at 1-800-680-8533 or go to http://www.nslrelief.com for more information.
Article Source: http://EzineArticles.com/?expert=Holly_Petherbridge
Article Source: http://EzineArticles.com/7788288
Only Stafford loans will see the interest hike. These subsidized loans are given on an 'as-needed' basis for undergraduates. The amount is determined by filing the Free Application for Federal Student Aid form. The free forms must be received within set guidelines which vary depending on state and college. While students are attending school, the interest does not accumulate. Once payments begin, the interest will accumulate. Look for student loan consolidation to help to lower payments if they are unaffordable.
Here is the good news! Loans which were issued before the July 1 date will have the 3.4% rate locked in for the life of the loan. Those loans issued after this date will be set to double at 6.8%. For those students who will be obtaining Stafford loans in the future will be looking at paying almost $2.00 in interest each day for a $10,000 loan.
This higher rate is not new to Stafford loans. It is actually the old rate before Congress began to slowly decrease the rate in 2007. It isn't that politicians want the increase to return. Last year they extended the 3.4% rate for an additional year while Democrats and Republicans worked on a solution. The extension will end the first of July and the parties have yet to agree on a solution to keep the rates low.
President Obama suggests that the loan rates should vary year to year depending on the rates of market conditions. The good side to this idea is that while the rates vary, there may be times when the rate drops even lower than the 3.4%. Who would be complaining during those years? Since the loan rates get locked for the life of the loan, these applicants will have inexpensive loans to pay off. The bad part falls on the years where the rates could possibly climb even higher than the now proposed rate of 6.8%.
There are some Democrats who would like to see the current rate extended another year or two in order to come up with a new law for federal student loan rates. House Republicans recently passed a bill similar to the President's proposal but it included both subsidized and unsubsidized loans. It also differed in that the rates would vary (with a Stafford cap at 8.5%) until graduation when they would then be locked in for life. Senate republications offer varied rates which lock in for life as the President's offer.
What does this mean to you the borrower? There is no finite result on the table as of yet, but if you fill out the Stafford application form now as well as find all other options that you may qualify for. Keep in mind that even with the proposed raised interest rates, federal loans are less expensive than private ones.
Professional student loan help companies work diligently every day to help relieve the burdens of student loan debt. Contact one today for a free consultation to make your student loan debt more affordable.
National Student Loan Relief helps individuals gain financial relief from their Federal Student Loans. Contact us at 1-800-680-8533 or go to http://www.nslrelief.com for more information.
Article Source: http://EzineArticles.com/?expert=Holly_Petherbridge
Article Source: http://EzineArticles.com/7788288
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