Student loan interest rate set to double Monday

6:17 PM, Jun 28, 2013   |    comments
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By Art Holliday

ST. LOUIS (KSDK) - College students loans all over the country are speaking out against an automatic increase on federal student loan interest rates.

The rate hike doubles on Monday. One local student is upset about a possible rate increase on her student loans.

St. Louisan Erica Pearson is determined to become a pharmacist, no matter what the cost.

"Going to mean a lot to myself because it's an accomplishment and the goal of mine. But even to my family, my community, to be able to give back you know. It's a prestigious career," said Pearson.

Pearson is majoring in pharmacy and chemistry at University of Missouri-Kansas City. She has so-called Stafford loans, government subsidized student loans of more than $49,000.

For Pearson, more loans are expected for her eight years of schooling. Her current 3.4 percent interest rate is about to double on Monday.

"It's one thing to have to take out a loan. It's another thing to pay interest on that loan. For the interest to double, it's depressing," said Pearson.

Students all over country are trying to get the attention of Congress. One group of students chanted "Don't double my rates" across the street from the Hart Senate Office building. Whatever solution Congress eventually reaches, won't happen until after the July 4th break.

Doug Kiffmeyer is a financial professional in Alton, Ill., who says students are already struggling with too much debt.

"Let's say someone took out the maximum amount of a government loan for college which is $23,000. At 6.4 percent, that's going to be an additional $4,000 in interest total that they are going to have to pay back," said Kiffmeyer.

He says there are long-range consequences for saddling students with massive loan debt. They delay making purchases like cars and houses, which slow the economic recovery.

 

KSDK

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