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[quote]
NEW YORK (CNNMoney) -- Attention college students: The interest rate on federal student loans is scheduled to double this summer unless Congress acts soon.</p>
<p>Loans taken out for the current school year carried an interest rate of 3.4%, thanks to a 2007 law that phased in rate reductions for subsidized Stafford loans to undergraduate students. But the law did not specify the rate after this year. So unless something is done, rates on new loans will revert back to 6.8% -- where they were in 2007.
<p>Do note that unsubsidized Stafford rates are already 6.8%. Only subsidized Staffords are at 3.4%. In 08-09, sub interest rate was 6%, in 09-10 it was 5.6%, and in 10-11 it was 4.5%. In 06-07, loans were 6.8%. Grad sub interest is 6.8%, same as grad unsub.</p>
<p>New graduate and professional Stafford loans will no longer be subsidized by the federal government after July 1. In other words, the interest will start to accumulate soon after you take them out. You won’t have to pay the interest until after you graduate, but it continuously adds to the principal on the loan.</p>
<p>I guess we really had it good in the late 80’s when interest rates were often in the double digits for mortgages etc., but our guaranteed student loans rate was set at 5% and did not accrue interest for us until graduation.</p>
<p>my student loan rate is only about 2 percent or something like that… same as my car… there’s pretty much no incentive to pay it back early. it’s amazing what rates are on things these days.</p>