College students taking out federal student loans may see their interest rates double in July unless Congress decides to enact legislation. According to the Baltimore Sun, the rate on subsidized Stafford loans is a fixed 3.4 percent, but that is set to expire and revert to 6.8 percent for new loans issued starting on July 1.
Students with loans that have already been delivered will keep current interest rates. Stafford loans are awarded to students who are in financial need, as the government pays the interest while students are in school. Unsubsidized loans, which borrowers pay interest on, already have an interest rate of 6.8 percent.
Student loan advocates are alarmed about the potential increase. “The last time was in the middle of an election cycle. It became an election issue. This time around, there is no election,” said Mark Kantrowitz, publisher of FinAid.org, a provider of aid information. “Getting anything through Congress is difficult.”
For many student loan borrowers, a Chapter 7 or Chapter 13 bankruptcy can still help even though their student loan debt is nondischargeable, as you can discharge credit card debt, medical bills and unsecured personal loans.
If you have student loan debt, bankruptcy may be able to help you even if you thought it could not. Contact our Washington DC and Maryland bankruptcy lawyer to learn more about whether you should file bankruptcy to deal with your student loans.
Judd’s Judgment: The median salary for college graduates fell from $30,000 in 2007 to $27,000 in 2011.