<p>Not official yet but I expect by 5PM today we'll hear that Stafford loan rates will NOT balloon to 6.8% on Sunday...</p>
<p>That would be a lovely thing. Maybe this musician kid of mine, who graduates next April, can catch a break ;)</p>
<p>That would be great. It would be the first positive FA related action in a long tome.</p>
<p>Just to clarify for any newbies out here (not ^^^ you guys of course), the 3.4% rate would just be for subsidized stafford/direct loans. Unsubs will stay at 6.8%.</p>
<p>I don’t want to start a war, but I am a bit irritated. </p>
<p>The subsidized loans were already catching a break, e.g. no interest while the student is still in school. When a student graduates isn’t he in the same boat as the student who graduated with unsubsidized loans? I.e. If both have the same degree, then both have the same earning potential? Then shouldn’t both of them pay the same interest?</p>
<p>Don’t get me wrong, I am all for lower interest to help out young generation. But it should apply to everyone, once the degree is awarded.</p>
<p>P.S. I don’t have student loans, so I don’t have a direct stake in this. Only indirect, as a taxpayer.</p>
<p>That is actually a good point. No interest while in school is a pretty good benefit.</p>
<p>Personally I think 6.8% is a pretty high interest rate in this day and age.</p>
<p>^^^ I agree. Especially for a loan that is essentially impossible to get out of (via bankruptcy).</p>
<p>I see lerkin’s point too. The unsub Staffords are part of the annual loan limit of $5500 for freshmen (I know it goes up in years after). Aren’t they or am i wrong?</p>
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<p>For people like us, with a good credit history, it is probably high. However for those who don’t have one - the students - 6.8 is a pretty good rate.</p>
<p>I was irritated that students complained about interest rate, because they are high risk borrowers and thus 6.8% seemed reasonable to me. However after thinking it over, I would not mind if it was lowered (for everyone), because it will make it easier for them to pay the loan off and have discretionary income to contribute to economy and enjoy the fruits of their labor.</p>
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Yes, it is part of the loan limit. For a freshman the limit is $5500 and up to $3500 may be subsidized if there is financial need.</p>
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<p>I hadn’t thought of it that way. On the other hand they can’t avoid paying it. Well theoretically - my son keeps getting phone calls from collection agency trying to track down his ex GF who is not paying her student loans. (They broke up several years ago and he was worried she was still using him as a reference so he asked them what the calls were in relation to).</p>
<p>It’s a high rate for a loan that is guaranteed by the government, is not dischargeable in bankruptcy, if not yet paid never leaves a credit report and can ultimately be collected by the IRS (tax refund) and wage garnishment.</p>
<p>Mortgages and credit cards don’t have those “benefits”.</p>
<p>Done before 3PM EST :)</p>
<p>[Congress</a> approves new highway funding/student loan bill - CNN.com](<a href=“http://www.cnn.com/2012/06/29/politics/congress-highway-bill/index.html]Congress”>http://www.cnn.com/2012/06/29/politics/congress-highway-bill/index.html)</p>
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<p>But as of now (starting couple of years ago -LOL), they are not given to everyone who fills out application - only to those who are deemed creditworthy - as opposed to Direct loans that are given to every HS graduate who fills out FAFSA.</p>
<p>But I see you point too. As I stated I don’t have a problem lowering the interest, I just feel it should be lowered for everyone, because once students graduate they have the same earning potential (given they have the same degree).</p>
<p>If the sub loans go to students with demonstrated need, I suppose one could say the family resources aren’t there to help out as they would theoretically be with students who only qualify for un-subs?</p>
<p>And let’s not forget all of those graduate students who, regardless of need, are now no longer eligible for subsidized loans. Thank you, Congress.</p>
<p>^^ Med students are feeling the pinch after losing their subsidized loans. Big loss. 4 years of HUGE loans. Not sure if they take loans during residency. . . and people wonder why there is a shortage of doctors.</p>
<p>Subsidized loans go to students with unmet need, as defined by the government. That’s why the borrowers get a break. Unsubsidized loans are in excess of need. </p>
<p>You can argue about the definition of need, but I think that’s the logic.</p>
<p>I heard the new law eliminated the interest-free six-month grace period after graduation and that the loan begins to accrue interest the day of graduation. Does anyone know if this means that interest accrues during graduate school even though payments are deferred?</p>
<p>Adding to skyewalk’s questions - Is the subsidized rate fixed at 3.4% for the life of the loan if we sign up for the 2012-2013 school year?</p>
<p>yes, the loan rate is fixed for the life of the loan. The action by Congress is only for the next school year, in July 2013, loan rates for new loans go to 6.8% unless Congress acts again.</p>