The recent increase in interest rates on student loans was mind blowing. Students heading to college may wonder how they’re going to be able to afford loans and students that are already in college may wonder how they’ll be able to finish their education. Good news has come from this increase from both senators and state governments. Still, students should consider alternative ways to pay for their education.
How Much Did Interest Rates Increase?
Student loan interest rates are getting out of control. In some cases, graduate students could face paying interest rates of close to 10-percent. That’s a huge amount to pay, especially when these students could have semesters that range in the $30,000 range. Several years of graduate school could leave the average student paying their student loans for the rest of her life.
What Are States Doing to Help?
Some states are taking action by either offering higher education with free tuition or trying to get the laws passed. For example, a school opened in Minnesota that offered free courses. In the beginning, the state said the school couldn’t do such a thing without paying numerous fees, but relented and is now working with the school to provide courses for free to students.
How Are Senators Addressing the Issue?
Senators are also working to create a cap on the amount of interest that can be charged on student loans. According to The Washington Post, “Under this new proposal, undergraduates would all pay the same interest rate, a change from recent years when some low- and middle-income students received a lower rate. Graduate students and parents of students would pay higher interest rates with higher caps.” Whether or not this will really help the situation is uncertain. After all, how many undergraduate students can afford the interest rates that graduate students, who more than likely have a good entry-level career, currently pay?
Why Should Students Work Harder Than Ever?
Students that want to go to college and don’t want to worry about interest rates should work even harder to bring up their grades and do community work that will help them create worthy scholarship applications. A well-rounded student has more access to scholarships. With interest rates rising, there will be more competition to obtain these much needed grants. You can ask questions and read more about college finances and opportunities on sites like SmartAsset.
A student loan is never the ideal way to pay for college, but sometimes it’s the only option. Unfortunately, the price of these loans continues to get higher and higher. With some interest rates closing in on 10% students need to carefully consider ways to make themselves better qualified to receive scholarships.