Sen. Tim Johson talks loan rate raises
by Breanna Fuss, Reporter
June 01, 2012 5:30 PM
If you’re a new student, a current student or possibly looking to go back to college, get ready because your pocket book may take a hard hit starting in July.
As of July 1st, students taking out Stafford Loans nationwide for this upcoming school year may end up paying double in interest, as rates may go from 3.4 percent to 6.8 percent.
Jim Rokusek, director of students at South Dakota Technical Institute says, "It doesn’t seem like a 3% raise is going to be significant, but for students it really is. Through a lifetime of a loan, it adds significant cost.”
Senator Tim Johnson sat down today with leaders from local colleges, universities and current students to get their take on the possible rate rise.
Sen. Tim Johnson said, "The most urgent thing is need we have is to stop the July 1st increase on Stafford Student Loans".
Johnson also said the biggest struggle in Washington is figuring out how to maintain the current interest rates even though the government owes 5.9 billion dollars.
Breanna Fuss said, "The profile for a South Dakota student, is a first generation student, coming from a working class family, and a number of these students are non-traditional.”
80 percent of South Dakota students use the Stafford Loan...and come July 7.4 million students nationwide will be affected by the change.
Lindsay Haase, a mom of three and full time student says she understands the increase...but questions it’s timing.
"I would like to move on and try to get into pharmacy school, but again, if the rates increase and its going to have to be double, I don't know if that would be an opportunity I will have," Haase said.
The feelings were mutual as all agreed that in these tough economic times many students and their families rely on federal loans to help pay for school...loans that could potentially take longer to pay off.
And if you already have student loans, no worries, the new interest rate will not affect you.