Federal student loan interest rates are on the rise.
Undergraduates who take out federal subsidized and unsubsidized student loans for the 2014-15 school year will face an interest rate of 4.66 percent, up from last year’s rate of 3.86 percent, according to the U.S. Department of Education’s student aid office.
Graduate students are affected as well — their interest rates bumped up to 6.21 percent from 5.41 percent.
Direct PLUS loans, available to graduate or professional students and parents of college students, have gone up to 7.21 percent from 6.41 percent.
Interest rates for student loans are set every July 1 and stay in effect until June 30 of the following year. The rates, which are set by Congress, remain fixed for the life of the loan.
The new rates are reportedly lower than if Congress hadn’t passed the Bipartisan Student Loan Certainty Act of 2013. Under earlier regulations, rates would have been 6.8 percent for all Stafford loans, according to The New York Times.
President Barack Obama announced in early June that he’d be taking executive steps to aid Americans struggling with their student loan debt.
That includes expanding the federal “Pay As You Earn” program that lets borrowers to make loan payments at a maximum of 10 percent of their monthly income.
What do you think about current federal student loan rates? Should the government be doing more to help struggling students – or less?