Local students react to student loan rate increase - KALB-TV News Channel 5 & CBS 2

Local students react to student loan rate increase

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ALEXANDRIA, La. (KALB News Channel 5) - Congress is meeting this week to find a solution to the doubled student loan rates. Due to inaction by members of congress before the July 4th holiday, student loans rates doubled from 3.4% to 6.8% last week.

There is some concern among students at LSUA about increases to student loan interest rates. While those rates could change, many students are still worried.

"Basically it's a college crash because all those students that graduated have to work double jobs in order to pay back loans," said LSUA student Nicholas Sinanan.

"Well my parents are a little bit older. They won't be able to take on as much responsibility. It's going to be more so on myself to take care of myself once I move out. That's why they are really pushing me to do so many things like being here at LSUA, so that I can experience it, and also with TOPS and things, get the free money and scholarships and things like that because they can't afford to help me pay back my loans. They can't afford to help me get into college," said student Jakela Chavis.

Students say with the extra expenses, applying for certifications, graduate school, or even beginning their careers with an increased debt load could prove to be difficult.

"Getting a pilots license, going to college for becoming a pilot, it's a lot, and I need student loan rates to go down in order to achieve that goal," added Sinanan.

However there are alternatives to student loans.

"Do your best to get scholarships. Just do everything that you can. There are so many scholarships out there, so much free money that you can get. Just do everything that you can receive that."

This doubling only affects new loans, which is not a majority of student loan debt. According to a congressional report, this would add an additional $2,600 in interest to students' overall debt.

Senate Democrats are hoping to extend the 3.4% interest rate for at least another year. In an effort to protect students, top Senate Democrats are asking for a cap to prevent drastic increases in student loan rates if they are tied with current U.S. Treasury rates; a proposal supported by the President and various congressional republicans. 

A bipartisan plan would lock-in loan rates throughout the life of the loan. Republicans hope to tie interest loan rates to the 10-year U.S. Treasury rates with loan rates not locked-in for the life of the loan, thus varying with the market. A decision is hoping to come to fruition this week. 

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