Student Loan Deal Doesn’t Guarantee Long-Term Relief
BOSTON (CBS) — A deal is at hand on Capitol Hill to roll back the doubling of rates on popular Stafford Loans that kicked in on July 1st.
But the deal doesn’t guarantee long-term relief for borrowers.
An undergrad taking out a Stafford Loan today would pay less than 4-percent interest, well under the current 6.9-percent rate.
But if the 10-year treasury note interest rate rises, that same loan could cost future borrowers up to eight-and-a-quarter-percent.
That didn’t go down well on the campus of UMass Boston.
Johanna LaFond, a physician assistant wants to know how she is supposed to pay.
“My mother’s unemployed right now so that would have to come out of my pocket and that’s hard to do. I don’t have that much experience so how am I suppose to get a job? A well-paying job?”
Senior Director of Financial Ad Services Alberta Cavanaugh believes Congress will do right by students.
“Perhaps they’ll become more savvy with their borrowing,” Cavanaugh said of future students. “The increase to interest rates will never be of any benefit to the students, with Congress knowing that they will do the best by the students.”
Andrew Pollock, a UMass Boston graduate says the changes may promote more responsible borrowing behavior but education on new loan practices is needed.
‘I would say for a young freshman, depending on what household they’re coming from, how informed they are, I would definitely say there needs to be knowledge about those loans.”