Senate Plans to Lower Interest Rates on Student Loans

     An article in The Washington Post discusses the Senate's approved plan of lowering interest rates on student loans.  This news comes as a relief to many students across the United States, including me.  As a student who is now entering my freshman year in college, I am wondering the same thing that most students in my positions are: How am I going to pay for college?  One of the most used options by students to help pay for college are student loans.  But with interest rates sorrowing, it is becoming more difficult to pay these loans off.

     The Senate's approved plan will set interest rates using the value of the 10-year Treasury bill and a percentage add-on, which will then lock on rates for the duration of the loan.  For the coming year, undergraduates, such as myself, can look forward to a locked in interest rate of 3.86 percent with PLUS loans locking in an interest rate of 6.41 percent.  While all the graduate students who plan on attending school in the coming year, can see rates set at 5.41 percent.  All are which are currently lower than the current rate.

     This surely comes as a relief to many college students who are struggling to figure out how they will pay off these student loans.  However, this plan is in no way a permanent reform and could lead to rates higher than the current rates within just five years.

     Hopefully this plan will be a stepping stone to help lower the cost of college for students and make the experience more affordable.  With myself starting a degree in communications, I now know that I will have a lower interest rate on my student loans and it will make me obtaining my degree that much easier and little less expensive.


Source: The Washington Post, http://www.washingtonpost.com/politics/senate-approves-plan-to-lower-interest-rates-on-student-loans/2013/07/24/b612df0c-f46d-11e2-aa2e-4088616498b4_story.html?hpid=z1
Photo Credit: http://www.libertynews.com