The Rates Are Too Damn High: Student Loans About to Get More Expensive
By Consumers Union on Tuesday, April 15th, 2014
It’s Springtime, and for many students it’s decision time too. College admissions are in full swing, and many students are trying to figure out where to go to school – and how to pay for it. This decision has big financial consequences, as tuition keeps going up and more people have to take out student loans to pay for college. Roughly two-thirds of all college students leave school with student loan debt, averaging around $29,000. And that’s not even counting parents, who often borrow “PLUS” loans to help their children pay for college.
Now the loans may be getting more expensive, too – this week the Congressional Budget Office (CBO) released estimates on what the interest rates will be for the 2014-2015 on federal student loans, and the news isn’t good. Rates are expected to jump by about 1% across the board for students applying for loans this Fall.
Higher interest rates on student loans means you’ll be paying more in monthly payments after school, for years to come. So before you sign on the dotted line, make sure you carefully consider your options!
Luckily, the Consumer Financial Protection Bureau (CFPB) has a helpful online tool called Paying For College, which helps you compare costs at different schools and see what the monthly loan payments will be for loans you may borrow. It also explains different repayment plans you can use to manage your loans.
We also have our own tips on how to graduate with less student debt.
Consumers Union is working hard to bring down the costs of education and help current borrowers stay on top of their loans. We’ve joined a big campaign called Higher Ed, Not Debt, which aims to pressure policymakers to make the education system fairer and more accessible to all. Stay tuned for more developments!
Are you a student or parent trying to figure out how to pay for college? What concerns you most? Tell us in the comments.