July 1st was not a happy day for American students who are considering Stafford Loans. On that day the interest rate on Stafford Loans doubled from 3.4% to 6.8%.
Is it time to hit the panic button? Maybe. But before you do, here are some things that you should know . . .
- The new interest rate will apply only to new Stafford Loans. So if you already have one, your interest rate will remain at 3.4%.
- Stafford Loans are fixed-rate student loans that are issued by the Federal government.
- You can get one if you are attending college at least half-time.
- The loans are available for both undergraduate and graduate students.
- It’s easy and convenient to apply for Stafford Loans online.
So, Why the Increase?
We can thank our U.S. Congressmen and Congresswomen for letting it happen. You know the deal – our country is in the midst of a budgetary crisis and cutting costs wherever it can. Despite the fact that members of both parties love to say that America has to invest in education in order to remain competitive in the world, they are still taking boneheaded steps that hurt students, like increasing the interest rates on Stafford Loans. Can’t they cut something else instead?
Here’s how reporter Jennifer Liberto summed up the political landscape in a recent post on CNN . . .
- Senate Democratic leaders are pushing a bill that would extend the 3.4% rates for another year.
- House Republicans are taking a different tack. “They'd prefer a longer term solution,” Liberto writes, “like the one they passed back in April to keep rates low for now but rise along with market rates in the future.”
How Can You Keep Your Educational Costs Low?
Here at StraighterLine, we’ve published three practical manuals for students who want to save money on college. They offer powerful tools for reducing your college costs, and they’re free . . .
- Why Is College So Expensive? Part One
- College Cost Break Down: Why College is So Expensive? Part Two
- The StraighterLine Report: How to Cut the Cost of College
If you read these reports, you’ll discover that the best way to afford college is to spend less on it. That sounds pretty simple, but isn’t it hard to do? Not really. Many students report that they are now whittling down the cost of their first year of college to less than $2,000 by taking StraighterLine online courses, then transferring the credits they earn to their regular schools.
If you apply strategies like those, you can still earn your dream degree, even if Congress plays around with interest rates that are attached to your purse strings.
But come on, politicians. Can’t you find a way to cut costs without hurting education?
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