Student Loan Interest Rates to Double Starting July 1

Because of inaction on the part of Congress, the interest rate on federally-subsidized student loans will double.

Last year, Congress passed legislation deferring the interest jump but adjourned this week for at least a week-long vacation without addressing the issue.

A student holding a typical subsidized Stafford loan of $23,000 will pay an extra $3,000 over the next ten years. If a graduate has $85,000 or more worth of four-year school debt, they can expect to pay about an extra $140 a month for at least ten years!

According to NW Cable News, this could cause a drop in the number of student loan applications. Northwest experts who monitor such schools as UW, WSU, Eastern and others say more likely, though, students will start saving even earlier to offset the rising costs,  and will consider sitting out a year or two after high school to pile up cash before entering college.

Some good news, though, for WSU students: on July 1, the WSU Board of Regents will meet to discuss cancelling a proposed 2 percent tuition hike set for next year.

Overall, economists say student loan debt in the U.S. now stands near $1.2 trillion.