<p>I just looked up the Stafford Loan Rates for 2012-2013 - both subsidized and unsubsidized are set at 6.80. That is double last year where the unsubsidized was 3.40. At that rate it could be cheaper to take out a private loan - that rate seems outrageous in this economy - what gives?</p>
<p>Was the rate that low last year? I thought it was about 5-6% or so…but I could be wrong.</p>
<p>yes unsubsidized was 3.4 %</p>
<p>what is perplexing to me is the prime rate right now is 3.25% - exactly what it was one year ago.</p>
<p>Contact Obama. That rate is set by him and congress and yes is a ripoff!</p>
<p>Congress hasn’t acted yet- they have till July on subsidized loans.
Unsubsidized have been 6.8% for a few years I believe.
<a href=“http://studentaid.ed.gov/students/publications/student_guide/2010-2011/english/typesofFSA_loans.htm[/url]”>http://studentaid.ed.gov/students/publications/student_guide/2010-2011/english/typesofFSA_loans.htm</a></p>
<p><a href=“Your Guide for College Financial Aid - Finaid”>Your Guide for College Financial Aid - Finaid;
<p>Unsub rates for 2011-2012 are 6.8%, as they were for 2010-2011.</p>
<p>[Stafford</a> Loan Interest Rates < Information | StaffordLoan.com](<a href=“What is a Subsidized Student Loan? | Edvisors”>What is a Subsidized Student Loan? | Edvisors)</p>
<p>Unsub rates for 2011-2012 are 6.8%, as they were for 2010-2011.
Which is double the rate for my home equity loan.</p>
<p>Contact Obama. That rate is set by him and congress and yes is a ripoff! </p>
<hr>
<p>The loan rates were set in the Higher Education Act. In order to change the rates, Congress has to authorize the change. That would be a very wise move, in my opinion.</p>
<p>Obama did not set or change interest rates for Stafford loans. But, yes, it is a ripoff.</p>
<p>Yes I know the Unsub is 6.8, same as last year. The problem I see is with the Unsubsidized Rate for lower income families that doubled from 3.4 to 6.8% this year</p>
<p>The problem I see is with the Unsubsidized Rate for lower income families that doubled from 3.4 to 6.8% this year</p>
<p>You mean the Subsidized rate?
That won’t change until July & only if Congress allows it. So write your representative.</p>
<p>To me, it is not if Congress allows it, it is scheduled to go up to 6.8% unless Congress acts and agrees on not changing it. Realistically, what is the chance that Congress will pass something to keep it from going up? I am a little skeptical given the current political climate.</p>
<p>Also with 1% initiation fee on top of the 6.8%, I think the term “subsidized” no longer applies. I think I’ll be looking for private loan instead if that happens.</p>
<p>^^The subsidized portion is because payments are not due while a student is in school, and the feds pay the interest on the loan during that time.</p>
<p>The rates are high because the President and Congress increased Pell Grants, so nolw the Stafford borrowers are indirectly subsidizing the Pell grantees. (Just speadin’ the wealth around’.)</p>
<p>Hah, I see, “subsidized” means by borrowing, we are actually subsidizing pell grants! My kid is going to be a junior, so possibly about 2 years of interest free loan (less the 1% origination fee). If we can get 4% or less with no origination fee, then that is probably better in the long run. Especially for Senior year, it is really a terrible deal.</p>
<p>with 1% initiation fee on top of the 6.8%,</p>
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<p>The fees end up being 0.5%, or $5 per every $1000 borrowed. Not great, but not awful.</p>
<p>I don’t mean to scare everyone, but the buzz in financial aid circles is that subsidized loans will be eliminated in the future (not sure how “near”). The rumor for several years is that there will be a move to one grant, one loan, one campus-based program. This translates to Pell, unsubsidized loan, and federal work study. Other programs have been slowly falling by the wayside through the years, but there is still SEOG, sub loans, Perkins loans, etc. Do not be surprised to see the three I mentioned as the only programs in a couple years.</p>
<p>As Emeraldkity suggests, contact your Congress members. If you are concerned, you need to make sure your legislators know that.</p>
<p>Nice to see a thread where everybody agrees that the loan rates are too expensive with respect to the prime rate. Every time I’ve pointed this out, the thread has been filled with people telling me that I’m wrong.</p>
<p>Gotta love CC.</p>
<p>small nit, but the prime rate is probably not the best proxy to follow. The prime is based on A1 credit companies with (supposedly) the means to pay back the debt over time. In contrast, Staffords are given to unemployable college kids with zero means to pay it back.</p>
<p>But yeah, the rate is higher than it could be if Congress was not spending the ‘profits’ elsewhere.</p>
<p>Yeah, BB but Stafford loans can not be foregiven in banktuptcy. A1 companies do end up in Bankruptcy at times. Stafford loans, if not paid, can be taken out of social security.</p>
<p>Grad Staffords never got that lower rate. I believe Grad & UG used to be the same interest rate, then they lowered the UG only. Odd. If the rates should be lower, why not lower for all.</p>
<p>Currently subsidized & unsubsidized graduate loans are at 6.8%
[Student</a> Aid on the Web](<a href=“http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp#05]Student”>http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp#05)</p>
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