If you or your child is going to college next year, you are probably trying to decide how to pay for it. Determining which student loan is best for you can be difficult and the fluctuation in interest rates can make it more difficult.
The Congressional Budget Office (CBO) recently released a report projecting the interest rate for new federal subsidized and unsubsidized undergraduate loans will climb 1.23 percentage points, from 3.86% for loans taken this year to 5.09% for loans taken out between July 2014 and June 2015.
According to the federal Consumer Finance Protection Bureau, that would add $32.96 in monthly costs for every $5,000 taken out over a similar loan taken out between July 2013 and June 2014. Most students take out much more than $5,000 in loans, so the increase will be significant. The rates are expected be finalized next month.
If the CBO’s projections are accurate, the interest rate is expected to increase every year through at least 2018, when the rate is projected to be 7.05%. Sadly, even though the interest rate is climbing, most students don’t have any other option than to take the loans in order to pay for school.
According to the National Center for Education Statistics, most graduate students borrow an average of approximately $18,600 in PLUS Loans per year. If interest rates go up as projected, students who borrow after July will pay an additional $1,400 over 10 years of repayment each year they are in school.
If you need assistance with how to handle your student loan or you are being harassed by student loan debt collectors, let us help.
If you are considering obtaining a student loan, call DeLadurantey Law Office, LLC, at (414) 377-0518. We believe that each client should receive the individual attention necessary to reach their financial goals. Recognizing the needs of working clients, we maintain a flexible schedule and offer evening appointments. Initial consultations are always free, and phones inquiries are always welcomed. Find us on the Internet and on Facebook.