federal government student loan
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College loan costs set to rise Saturday
College costs keep spiraling upward, and now the cost of borrowing to pay for higher education is about to spike, too.
Students and their parents have taken comfort in a half decade of ultra-cheap college loans, loading up on debt to cover the bills. About eight million people borrowed $60 billion this year in education loans issued or guaranteed by the federal government. Now only those who act quickly will be able to keep a lid on the cost of that debt.
A combination of rising interest rates and legislative changes to the student-loan program will alter the student-loan landscape beginning Saturday. Rates on existing Stafford loans - the bedrock government-guaranteed student loans that 44 percent of full-time undergraduates rely on to pay tuition bills - change annually and are pegged to 91-day Treasury bills.
More federal government student loan info
4 Steps to Make the Most of Your Student Loans
San Mateo, CA (PRWEB) July 20, 2006 -- Now that this year's cap-tossing and graduation parties are in the memory banks, the reality of paying for that higher education is setting in -- but students still have options to choose the best way to handle college and graduate school debt.
"Most Americans with student loan debt saw a flood of news articles encouraging borrowers to consolidate their loans before government loans underwent their annual interest-rate increase on July 1," said Brad Stroh, chair of Bills.com, who noted that because of the rising U.S. interest rate environment and a government-mandated reset of rates on student loans, rates on federal student loan debt increased by a substantial 1.84 percent on July 1. "Now that student loan rates are no longer at the 3 percent interest rates they hit during the economy's slowest days, it pays even more to be savvy about borrowing for school or returning to school."
According to FinAid, two-thirds of college students borrow to pay for school, with an average loan debt of nearly $20,000.