Tri-State students and officials respond to spike in student loa - 14 News, WFIE, Evansville, Henderson, Owensboro

Tri-State students and officials respond to spike in student loan rates

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Interest rates for new student loans are set to double next week and the Senate doesn't plan on voting before the deadline on Monday. 

Students in Washington D.C. held a protest on Friday, the crowd chanting, "don't double our rates."
     
Those rates are set to jump from 3.4 percent to 6.8 percent. That means thousands of students in the Tri-State could be stuck with a much bigger bill when they start paying that money back.

"When I graduate, I don't know what job I'm going to have  to where I can manage the cost of living, along with paying off those loans," USI sophomore Lane Rusher says. 

Rusher says she's constantly worried about the day she'll begin paying back her student loans.

"It scares me. I know as soon as I take out those loans, they're going to start accruing that bigger interest," Rusher says.

Lane is one of more than 7 million students across the country whose new subsidized Stafford Loan interest rate will double come Monday. The new rate of 6.8 percent could cost the average student an additional $2,600 in interest.

"The payment period is spread out over a 10 year period, so I don't think that $2,600 is going to boost that monthly payment up that much," says Mary Harper, USI's Financial Aid Director.

Harper says the rate-hike could affect some students, but is still a viable option for those wanting an education.

"If students do their due diligence and borrow only what they absolutely need, I do not feel like this is going to be a deal-breaker," Harper says. 

Total student loan debt has quadrupled in the past decade to nearly a trillion dollars. Rushing says it's a small price to pay for a quality education.

"I have a lot in savings and I want to keep putting more and more in savings knowing that this is going up. So that when I graduate, I won't have just a massive debt," Rushing says.

The senate could take action after the July 4th holiday..

Iowa Senator Tom Harkin says he'll push for retro-active legislation to bring the interest rate back down.

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