College students: No sweat on loan impasse
The Canton Repository – Republicans and Democrats haven’t yet agreed on a plan to keep the subsidized Stafford undergraduate loan interest rate at 3.4 percent. If Congress does nothing, the rates jump to 6.8 percent on new loans after July 1. And many local college students who would be most affected by the hike, seem to be paying little attention to the debate.“I haven’t thought about the loans too much,” said Mike Jowers, 20, of Cuyahoga Falls, a business management major who’ll be a senior at Kent State University at Stark in the fall. “I haven’t paid it yet. So it hasn’t affected me as much.”
Administrators at local universities say students haven’t expressed too much alarm to financial aid officers.
“I don’t think they’re paying any attention,” said Gail Pukys, the assistant director of financial aid at Kent Stark, who believes that if rates went up to 10 percent, students would still be applying for loans, “because they don’t have to start repaying for four or five years.”
She said that in addition, interest on new subsidized Stafford loans disbursed after July 1 starts to accrue upon graduation rather than six months after graduation as with prior loans.
Pam Pustay, Malone University’s director of financial aid, said she’s gotten some calls from students about the issue.
“Most students, they think it’s something their parents have to be concerned about and not them,” she said. “Nobody is panicking. … they have other concerns right now. Getting past that final and getting registered for classes.”
Emily Mattison, the director of student financial services for the University of Mount Union, believes the impact of the higher rates on students will be “minimal” because many students also take out unsubsidized Stafford loans, where the interest rate already is 6.8 percent. For unsubsidized loans, interest accrues during school, unlike subsidized loans.
The impending increase also will not affect rates for Perkins loans, PLUS loans for parents, consolidation loans, private student loans and loans for graduate students. The maximum a student can borrow in subsidized Stafford loans is $8,000 the first two years and $5,500 a year after that, for a total of $23,000. And only people with sufficient financial need can qualify for the maximum amount. For those who borrow the maximum, the difference between paying 6.8 percent versus 3.4 percent is about $38 a month for 10 years or about $4,600, according to FinAid.org’s loan calculator.
