I remember when we were paying off our debt, my student loans had the lowest interest rate of all of our debt. I believe they were around 2.74 percent. However, times have changed. Overnight the interest rates on federally subsidized Stafford loans doubled, going from 3.4% to 6.8% after congress was unable to reach a deal.
There is a chance that this will get reversed as the Senate will be voting on July 10th for a one year extension. If the extension does not pass, it could end up costing the average college student an additional $2,600.
Looking to take out student loans to go to college?
Although this is not encouraging news, it does point out the challenges that come along with borrowing money. If you are considering taking out a student loan to go to college, think twice. I know plenty of people who worked to pay for school or found creative ways to keep from borrowing money. To help you find some alternatives to getting in to debt to go to school, check out How to Graduate College Without Any Debt.
Have you already taken out student loans?
If you are like most people (including myself) you may have already taken out student loans to pay for college. If you want to reduce your exposure to the interest rate hike, then consider creating a plan to pay off your student loans over the next year or so. I have created a FREE online class called Debt Free in 18 Months where I will teach you to organize your debt so that you can pay it off in a short period of time. The earlier you pay off your student loans, the less interest you pay: plain and simple. Why not take action and start paying off you loans today?
Do you still have student loans? If so, do you have a plan to pay them off early?