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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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Student Loan Rates Headed Higher
Borrowers with multiple student loans have less than 48 hours to consolidate their debt and possibly save thousands of dollars before interest rates jump at midnight Friday.
The consolidation option won't be a good deal for everyone, and it will require homework to determine the advantages and which lender to consolidate with. But higher education officials say it will be worthwhile for most borrowers to explore the option, even though they must act quickly in the face of confusing options.
"We're not telling anyone that they need to or that they don't need to," said Elizabeth Bickford, director of financial aid at the University of Oregon. ``We're saying, here's the opportunity. We want you to look at it, because we think most students would benefit in some way.''
A good starting place is the government Web site www.loanconsoli dation.ed.gov.