Perspective college students could be paying more for a common loan
Mon, 17 Jun 2013 21:45:53 GMT —
Prospective college students are going to pay more for the most commonly talked about subsidized loan.
Loan applications starting after July, 1st are going to have that doubled rate. Despite the upward trend students are still seeing the value in their education.
"It sucks knowing I have the debt coming but itâ??ll pay off," said Mott Community College student Joseph Barajas.
Congress is debating a number of bills to hold the Stafford loan down closer to the current 3.4 percent.
Yet even when doubled Dr. Chris Douglas says the cost is minimal.
"With the interest rate increasing it will be about an extra 40 bucks a month over the payment period so itâ??s not a whole lot of money but it is a hit," said University of Michigan Flint Economics Professor Dr. Chris Douglas.
Future professionals acknowledge the hit, but are staying committed to higher education.
"If its doubled it's a bad thing for us but were going to have to do it you have to take it," said University of Michigan Flint student Abdullah Salman.
Students like Abdullah Salman are exploring other options to stay away from high interest rates and the hike.
"I try my best to get scholarships and financial aid and try to leave the loans to the last resort," said Salman.
For perspective students guaranteed to feel the spike, Douglas says taking a hard look at the cost of school to the benefit of a degree will point to the right direction.
"It might change that cost benefit calculation a little bit but I don't think it changes it that much," said Douglas.
Douglas says the separation between the income of educated workers and those without schooling is growing, making a degree more valuable.
"At a certain point in my life I am going to make double and triple the money I am using now for loans and school," said Salman.
"In the long run itâ??s definitely going to pay off," said Barajas.
The cost benefit calculation is weighing in on how much money you can make at a job right out of high school until the point of college graduation and comparing how much money could be made or owed.