Surprise! Interest on student loans to jump by a record amount

[Bluebear]

Now that bankruptcy is no longer an option.....

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Interest rates on federally backed loans for college students are set to jump by a record amount on July 1, the Department of Education said Tuesday.

Based on the results of a Treasury bill auction, the in-school rate on the federal Stafford loan will rise by 1.93 percentage points to 4.7 percent.

The rate for loans in repayment will rise by the same percentage to 5.3 percent, while the PLUS loan rate for parents will rise to 6.1 percent.

The rates are based on the three-month Treasury bill auctioned Tuesday. That bill carried a discount rate of 2.935 percent. The discount rate a year ago, before the Federal Reserve started to raise its guiding interest rate, was 1.050 percent. That resulted in the lowest interest rates ever for student loans.

http://news.yahoo.com/s/ap/20050531/ap_on_bi_ge/college_loans&printer=1

[HeeBGBz]

1. What a racket

Each time I set up a payment plan to pay mine off, they sell it to someone else and have to start all over. They garnish my wages and I pay $3 for each time my boss sends them a check. Then they sell to another and the checks my employer sends start coming back.

They've taken my tax refunds year after year and still I pay. Oh and they never bother sending me a receipt as to what I've paid.

Fuck them.

[annarbor]

2. For the record....

Those of you with federal student loans that are not scheduled to graduate until after July 1 are now eligible to consolidate your loans prior to the July 1 intrest rate hike. That info is not as widely advertised as the interest rate hike. I just consolidated all of my loans, but the catch is, I have to start repaying them in a couple of months vs a couple of years from now. My loan consolidation is saving me THOUSANDS of dollars over the life of my loans. Please, please, contact your lenders now so that you can start the process before the cutoff date!

Ann Arbor
Class of 2005 (Winter)

[SnowGoose]

6. Hi annarbor, I live here in A2 too.

I wonder how many of us there are.

[annarbor]

7. Hey back at ya!

Soon-to-be EMU Master's grad here.
Glad to run into a fellow Ann Arborite here...there has to be a slew of us on this board. This site is so fitting :)

[xynthee]

3. Finally!

I'm so sick of the middle- and lower classes getting all the fucking breaks in life!!

[PowerToThePeople]

4. Yup, consolidate and lock in low rates.. n/t

[annarbor]

5. By the way.....

I used Salli Mae to consolidate, but there's a gaggle of companies out there just waiting to hear from students.

Ann Arbor

[indepat]

8. But this Congress is keeping taxes low

[DearAbby]

9. Gawd I am sooooooo glad I paid mine off last year

:::doing the dearAbby okie dokie dance::::

Lets make it harder for people to advance their education administration. A dumb populous is an easy led one. makes the job of Dick-Tader easier.

[SmokingJacket]

10. this really, really stinks.

I'm wondering how sensible college is for a lot of people anymore.

My kids are still young, but sheeet, I don't want them to be in debt for the rest of their lives because college is the thing everyone does.

Maybe they should take up stained glass design, and read the great books at home.