NEW YORK (PIX11) – Student loan rates doubled Monday after Congress went on break without reaching a deal.
Although the new rates won’t affect those who already have loans, the rate hike will effect some seven million students who apply for new subsidized Stafford student loans after July 1.
Monday, the rates went from 3.4 percent to 6.8 percent. Generally, government-funded loans have low-interest rates for students. Young people pursuing higher education are now having a hard time purchasing a home, thanks to crushing student debt that has an adverse affect on their credit ratings.
Congress is not concerned just yet because the rate hikes only affect new loans, not existing ones. Most students don’t start taking out loans until the end of summer, for the coming school year.
There is also a chance that a deal will be reached, crediting students retroactively.