Student loan interest rates have risen recently as borrowers await answers on debt forgiveness and extended pause on payments
Student loans became even more expensive for the pockets of some borrowers on July 1 Forbes reported earlier this week.
July 1 marked the start of an interest rate hike for existing borrowers. The highest rates are shown throughout the article.
And yes, only current student borrowers are impacted by these higher rates. If you have existing student loans, your interest rate has not changed.
Although increasing interest rates is only one of the concerns with student loans. Other major worries for millions of Americans are whether the Biden administration will cancel student loans and whether the pause in student loan payments will continue (without accrued interest during this extended period), which is currently due to expire on 31 august.
The Biden administration suggests another extension is likely, but there has been no official word yet. The nationwide pause on federal student loans deepens in year three. However, it was originally only scheduled for six months, due to the economic shutdown caused by the COVID-19 pandemic in March 2020.
The economy kind of approved itself from 2020, but it’s still not great. Inflation rose and there were rumors of another recession, according to Forbes. The Biden administration has said the economy will be a big factor if the pause on student loans is extended.
Education Secretary Miguel Cardona has hinted at another extension of the break. “We recognize that even though the economy has improved, many Americans are still struggling to make ends meet,” he said.
The Department for Education reportedly said there would be “adequate notice” of the extended break. Thus, borrowers would have enough time to prepare for repayment or not. However, with the break ending just seven weeks away, time is quickly running out on the administration’s announcement on the future of student loans.
Find out more via Forbes.