Higher interest rates impact local students
Interest rates double today for any students applying for the federal government's subsidized Stafford loans, after Congress failed to agree on a deal to lower interest rates.
Students at Onondaga Community College take out $21 million in loans every year to help pay for their education. Financial Aid Director Kate Bellefeuille says some potential students at OCC will be affected by the higher rates, which are jumping from 3.4 percent to 6.8 percent.
"It may not be today, it may not be impacting students today, but they will have to reach some sort of deal," Bellefeuille said. "I don't think Congress is going to let the interest rate stay at 6.8 percent."
She says the interest increase would add $2,600 over the life of an average loan of $23,000 to $24,000.
"When you look at it from the perspective of a student, and they're just beginning repayment or repaying for that 10-year period, it does add up," Bellefeuille said. "It's $2,600. I don't know any of us who would voluntarily want to pay $2,600 for a loan that we don't have to."
Bellefeuille says the financial aid community is expecting Congress to take action on the issue later this summer. If nothing else, she believes lawmakers will extend the lower interest rate for another year.