Federal student loan rates to go up next school year

Education

BRIGHTON, NY (WROC) — According to a New America public policy think tank study, federal student loan debts are scheduled to jump come fall semester. Interest rates for undergraduate loans will spike from 2.75% to 3.73%. 

Financial expert George Conboy with Brighton Securities says the cost of federal loans is going up because interest rates are rising. Conboy did say however, federal loans are still cheaper than private loans for college.

He says this is just one more cost students will have to pay down the line. Simply put, he says ‘the cost of money is going up’. 

“The fact is, interest rates across our economy have begun to rise in the last six months. The federal government has put out an awful lot of money in form of stimulus payments, in extended unemployment…and the fact is, eventually, the bill comes due. No one gets free money. You may have gotten a stimulus payment with your right hand…and with your left hand, you’ll go pay it back in the form of higher interest rates,” says Conboy.

Despite interest rates for these loans increasing, experts say they are actually still low compared to the last decade. 

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