A push to increase the interest rates on Stafford loans has college students up-in-arms. Because Stafford loans are primarily for low to middle income undergraduates, the Associated Press noted, raised interest rates could result in hardships down the line for many college students.
Unless Congress intervenes, the interest rate on Stafford loans will jump from 3.4 percent to 6.8 percent on July 1, despite the hope of the Obama administration to freeze the interest rate in the 2013 fiscal budget, USA Today explained. The source also noted that if students take advantage of the maximum amount of $23,000, said higher-education policy analyst for U.S. Public Interest Research Group Rich Williams, borrowers would pay an extra $5,000 in interest over 10 years. The Associated Press reported that the average college graduate owes $25,000 in loans and student loan debt has surpassed credit card debt. Williams told USA Today that if Congress doesn't intervene, the most vulnerable college students will be forced into higher payments after graduating due to the interest and the nationwide trend of raising tuition. Debt recovery service
agents may want to remain informed about the potential change, as an increase in the interest rate would affect approximately 8 million people nationwide, USA Today reported.