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NATIONAL PROGRESSIVE GROUP DECRIES STUDENT LOAN INTEREST RATE HIKE
A coalition of progressive activists said that recent increases of student loan interest rates would cost California college students between $2,411 and $2,902.
According to the Campaign for America's Future, or CAF, the rate increase on Stafford loans, from 5.3 percent to 7.14 percent on old loans and to 6.8 percent on new loans, will push college students and graduates deeper into debt.
Parents who take out PLUS loans to help their children pay for an undergraduate education will see their interest rate rise from 6.1 percent to 8 percent on old loans and to 8.5 percent on new loans on Saturday, according to the CAF. The average parent in the country will pay an extra $3,000 and $3,953 respectively, the organization reported.
"The failure of the current administration and Congress to make college affordable for all qualified students is a disservice to the country,'' said Robert Borosage, the co-director of Campaign for America's Future.
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Bank sees rush to lock in low rates
The Bank of North Dakota will process more than 7,000 applications for federal student loan consolidations after being inundated last week with requests to lock in an interest rate.A mad rush of applications came in June because interest rates increased on July 1.Julie Kubisiak, senior vice president and director of student loan services, said the bank has finished processing about 4,200 applications and has about 3,000 to go. Those applications started coming in steadily at the the end of May through June.The bank received about 11,145 phone calls regarding student loans in June, which is more than double the normal amount of between 4,000 and 5,000 per month.Kubisiak said students were able to lock in an interest rate of as low as 4.71 percent.Federal loan consolidations are now expected to slow because now the rate people can lock into will be 6.8 percent.