Interest rates on new student loans to rise sharply
The interest rates on new student loans will go up in July, the Washington Post reported Thursday.
The hike will be the biggest percentage jump since 2013 and is the result of the Treasury Department’s auction of 10-year notes on Wednesday, the Post reported. The increases were widely anticipated as Treasury yields have risen in response to the Federal Reserve’s recent interest rate increases.
Undergraduate students will pay 4.99% in interest on new Stafford loans, up from 3.73%. Graduate students and parents who take on federal debt to help their children pursue a degree will see the interest rate on new PLUS loans rise from 6.28% to 7.54%, the Post reported. The new rates are good only for loans taken out to pay for the 2022-2023 academic year and have no impact on existing education debt.
“If you’re a graduate student borrowing tens of thousands of dollars a year, this [rate increase] is more consequential than for an undergraduate in their first year, when at the most you can only borrow $5,550,” Jason D. Delisle, a senior policy fellow in the Center on Education Data and Policy at the Urban Institute, told the newspaper.