WASHINGTON — Congressional inaction could end up costing college students an extra $5,000 on their new loans.
The rate for subsidized Stafford loans is set to increase from 3.4 percent to 6.8 percent on July 1, just as millions of new college students start signing up for fall courses. The difference between the two rates adds up to $6 billion.
Just a year ago, lawmakers faced a similar deadline and dodged the rate increase amid the heated presidential campaign between President Barack Obama and Republican challenger Mitt Romney. But that was with the White House up for grabs and before Washington was consumed by budget standoffs that now seem routine.
“What is definitely clear, this time around, there doesn’t seem to be as much outcry,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators. “We’re advising our members to tell students that the interest rates are going to double on new student loans, to 6.8 percent.”
The rates do not count for subsidized loans previously taken out by students - just for future Stafford subsidized loans.
Unsubsidized and private student loan rates are not expected to change.
Let's see, the banks get money at 0% and lend it out at 3.4% -hmm, that's a pretty good deal for the banks.
Now they get money at 0% and lend it out at 6.8% - and the loans are "guaranteed".
Sure is good to be bankster.
Might say it's better to be a bankster than even a king.
And where is Obama in all of this?
So far, pretty silent.