WASHINGTON - If you're strapped with a student loan and worried about the doubling of interest rates, you may not have to worry, at all, depending on your loan.
Interest rates are doubling from 3.4 percent to 6.8 percent only on new, subsidized, federal Stafford loans.
Students only borrow money for one school year at a time. Subsidized Stafford loans taken before Monday are not affected by the rate hike, nor are federal PLUS, Perkins or unsubsidized Stafford loans slated for the coming year.
While millions of students will be taking out loans this year, they won't feel the pinch at least until they graduate. Interest isn't charged on a loan while a student is enrolled in college.
According to Edvisors.com, on a 10-year re- payment term, the monthly payment will increase by about one-sixth.
CNBC reports the average amount of subsidized Stafford loan debt at graduation is about $9,000 or $11,000 for those receiving a Bachelor's degree.
Based on that amount of loan debt, the founder of Finaid.org calculates the borrower's loan
payment will increase by $18 a month on average on a 10-year repayment term or $24
a month for a Bachelor's degree recipient.