Student loan interest rates uncertain
Thu, 28 Jun 2012 03:53:18 GMT —
With only four days until the current 3.4 percent interest rate for student loans is set to expire, it appears the Senate is on track to pass an extension.
Tuesday night the Senate reached a bipartisan agreement but the House has yet to come to a consensus on whether to extend the rate deductions for one more year, something UTPA students say would make a big difference.
"I depend a lot on my financial aid for gas, for food things I need like my books so I would not appreciate that very much, UTPA sophomore Brianna Rodriguez said.
"I would have to pay more obviously and that would suck, UTPA sophomore Martin Nieves said.
No college student wants to see a penny added to their debt, but if Congress fails to reach an agreement by July 1, the 3.4 percent interest rate for student loans would double to 6.8 percent over night.
Congressman Henry Cuellar (D) said he is hopeful the House will follow the Senate and pass an extension, but it's not as easy as writing a check.
"The main thing has been how do we pay for this? The old days of putting everything on the credit card is done, Cuellar said. So we just have to find a sensible way of paying for this because it's not done for free. We are talking billions of dollars."
The extension won't just affect a few students.
At UTPA about 75 percent of their students receive some sort of financial aid.
Rodriguez says the extension will be worth the investment.
"The point of getting financial aid is to help us out, so later on if we would have to pay double that that would really hurt us instead of progressing in life we would have to pay that off, Rodriguez said.
Whether an extension is passed or not, UTPA financial aid associate director of outreach and communications Jael Garcia says students need to take the time to understand what a loan will cost them.
"Sometimes students don't really pay attention to the interest until it TMs time to pay back because at this point when they are still in school they don't see what their payment is yet, Garcia.
If Congress were to fail to extend the low interest rates it would be the first increase since the beginning of the recession.
The extension would save the average student who receives federal loans $950 a year.
A vote in congress is expected next Monday.