Posted at: 07/01/2013 10:39 PM
Updated at: 07/01/2013 10:43 PM
By: Steph Crock
(ABC 6 News) -- Starting Monday, millions of students will have to brace for a hike in student loan interest rates because congress couldn't reach a deal to keep the Stafford Loan interest rates low.
Interest rates on Stafford Loans have been bumped from 3.4% to 6.8 % and if the US Senate doesn't act fast, this could hurt students accepting a loan for the upcoming school year. "I originally wanted to go to Auburn which is in Alabama but it was too expensive so I thought it would be cheaper to go here for a year," said RCTC student Heather Gosse.
For students like Heather, every penny counts. "The fact that school is so much money, it just holds a lot of people back," said Gosse. She plans to take out a loan to make up for the out of state tuition next year, so hearing the final bill may be even more, is scary to think about. "Like if do 4 years of college, graduate, and then I can't find a job right away," she said.
"They're saying about $1,000 is what’s going to be the additional cost on top of the loan, but still, $1,000 is a lot for a student," said Assistant Director of Financial Aid at RCTC Natasha Thompson.
Which is why some students aren't accepting loans, at least until congress gets this sorted out. "Some people are a little more hesitant to take out the loans just because they are not sure what the interest rates are going to be and I don’t blame them," said Thompson.
She says students should still apply for the loan now if they need it, but suggests not accepting it just yet. "If they’re deciding to accept this loan, then they will be affected by this interest rate," said Thompson.
However, time is ticking for students who want to make sure they're covered for the upcoming school year. "I don't want to take out a loan but sometimes you just have to in order to get where you want to go," said Gosse.
Subsidized loans, however, still remain the same in that interest does not start accruing on those loans until after the student has graduated. U.S. lawmakers say they hope to reach a deal next week.