College students may pay more for school loans - 13 WTHR Indianapolis

College students may pay more for school loans

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INDIANAPOLIS -

In just weeks, it could be "Sticker shock for students" – as thousands of college students could end up paying more for their future student loans.

Hikes in student loan interest rates - that's what's behind the new cost.

The rate is decided by Congress. And while both parties say they want to dodge the increase...neither party's budget proposal in Congress has money set aside to keep student loans at their current rate.

College student Lauren Martin can only afford school part time...but has already racked up $12,000 in student loans.

"I definitely expect to be paying off my student loans for my entire life, I think most people do."

And if Martin takes out more loans to finish, it could cost her more to pay back.  The rates on subsidized Stafford loans will rise from 3.4% to 6.8%.

It's a hike that could cost students an extra $5,000 on their new loans.

"I'm unhappy with it.  I think a lot of people are." Martin said.

Lawmakers dodged the rate increase last year in the middle of a presidential election.  Now though, when the White House isn't at stake, student loan professionals say there's no hurry to stop the rate hikes.

They're telling students to count on higher rates.

Matt Will, University of Indianapolis, says, "I think students shouldn't worry about this.  If you're in school, this has no impact on you at the moment."

Economic experts say 6.8% used to be the norm.

"The loan rates went down starting in 2007. They were this high for many years.  It's only recently that they've been decreased and even then it only applies to people who have graduated."  Adds Will.

But Martin argues, "Money has decreased significantly in value over the past couple of decades, so comparing it, there would need to be a lot more math involved to see how your 6.8% compared to the 6.8% of what classes cost now."

Increase or not Martin adds, "I still need to go to college."

The deadline for Congress to do something about the rate hikes is July 1st.

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