Federal student loan interest rates have doubled–here’s what it means for you

July 1 has come and gone. If you’ve been following along with the news, you know that that means the interest rates on new federal subsidized Stafford loans jumped from 3.4% to 6.8%.

Watch this video to find out what it means for the 7 million students who will take out a federal student loan this year and how it could negatively impact the economy.

“It used to be the more education you had, the more likely you were to own a home. Now we’re finding that because of the debt the less education you have, the less likely you are to own a home–36% less likely if you have a student loan.”

While this rate increase doesn’t affect people who have already graduated and currently hold student loans, it impacts all new and future subsidized Stafford loan borrowers. This includes students who are already in college and planning on taking out loans to finance future years of their education.

It’s possible the student loan rate could be reduced when lawmakers return from the Fourth of July holiday, but there are no guarantees Congress will come to a compromise.

With student loan rates increasing, it’s more important than ever to be diligent in your college search and financial aid process. Check out our tips on making college affordable and feel free to tweet us @CFGCollege or call us at 1-888-234-3907.