Student loan interest rates poised to doubleFargo, ND (WDAY TV) - Student Loans and interest rates are on the minds of college students across the United States, and right here in the valley.
Student Loans and interest rates are on the minds of college students across the United States, and right here in the valley. Congress has not come to a conclusion whether to keep current interest rates at 3.4%. If there is no deal, rates will double to 6.8%.
Natural Resource Management major Dustin Simonson has had student loans since he was a freshman.
Dustin Simonson – NDSU Junior: “I have worked every summer to make up as much as I can, but it hasn't covered enough so I’ve had to have loans every semester.”
The thought of his interest rate doubling doesn't have this NDSU junior very happy.
Dustin Simonson: “It is going to take a lot longer to pay them off, and so not looking forward to that.”
In addition to the countless hours these students put into their school work and classes, it might almost become a necessity for them to pick up second jobs or extra side work to keep up with the extra financial burden.
Dustin Simonson: “I'll be working full time this summer already, but if there is a chance for a weekend job I might need to look into that to avoid the extra interest payments.”
Here is a breakdown of the numbers: If you are an incoming freshman with a $3,500 loan, you will go from paying $407 dollars a year in interest to $971. If you are a junior or senior, for a $5,500 loan you will go from paying $996 a year in interest to $2,095.
Jeanne Enebo – NDSU Student Financial Services: “The double of interest will place a huge financial burden to the students that are already in debt.”
NDSU Student Financial Services Director Jeanne Enebo says the students who will be most affected by this change will be the undergraduates.
Jeanne Enebo: “The interest will stay what it was at the time you took out the loan. It will be any new loans after July 1st of 2012.”
Although Simonson counts on student loans, with extra interest he may be making a different plan.
Dustin Simonson: “The plan was yea, now with interest rates going up, I will probably still need them, but if I can get away without them I’ll try and do that.”
The rates go up July 1st unless congress acts before then.