On July 1, interest rates on federally subsidized student loans temporarily doubled, jumping from 3.4 percent to 6.8 percent on new loans. By the end of July, Congress agreed to retroactively lower these interest rates by passing the Bipartisan Student Loan Certainty Act of 2013, which was signed into law on Aug. 9.
While interest rates on these loans are subject to change in the future because they will fluctuate with the health of the economy, undergraduate rates on federally subsidized Stafford loans for this academic year are locked in at 3.86 percent.
While the passage of the Bipartisan Student Loan Certainty Act garnered much attention from the media, James Stanger, associate director of technology and support in the YSU Office of Financial Aid, said some of this attention is unwarranted.
“I am stressing that a lot of this headline news is politicians playing politics,” Stanger said. “It’s positive that they kept rates low, but it is not solving a crisis.”
Stanger indicated that interest rates are only one factor that contributes to student debt. He encourages students to avoid future financial trouble by being responsible borrowers.
“We advise students from the first time they borrow to be proactive. The responsibility as a borrower begins the day they secure a student loan. Not the day they begin to repay it,” Stanger said.
Stanger suggested that students only borrow what they need, know their balance and be familiar with their loan servicer.
Some YSU students expressed relief that interest rates on their student loans will remain low for the coming academic school year. Devin Cowher, a chemistry major in her second year, described herself as a responsible borrower who benefits from low interest rates.
“I think it’s a good idea [to keep interest rates on student loans low] because I don’t have to pay as much later on,” she said. “I continue to keep my grades good, and I go to school every day, and I maintain a job.”
Lindsey Fisher, a senior integrated social studies major, said keeping interest rates low on student loans will benefit young adults.
“I followed the story very closely, and when I was a graduating senior in high school, I compared the different loans and interest rates because I wanted to try and graduate with the least amount of debt as possible,” Fisher said. “I am thrilled that congress has decided to not put that burden on its youngest and newest members of society because that would just be completely unfair. … Most other countries don’t handicap their most abled producers so early in life.”
Other students were not as certain about their feelings regarding the passage of the Bipartisan Student Loan Certainty Act.
Gina Gilmore, a junior business management major, said she does not think about her future finances.
“I know I am going to have to take [loans] out and probably be in debt for the rest of my life, but I think that the degree is worth it,” Gilmore said. “With the interest rates, I am glad that they are lower, and I won’t have to pay back more, but I’m really not much of a future thinker. I do what I can now and get what I can now.”