Students face double interest rate on subsidized loans - KSFY News - Sioux Falls, SD News, Weather, Sports

Students face double interest rate on subsidized loans after Congress Fails to pass legislation

Posted: Updated:

Congress has left Washington for the July 4th holiday after failing to pass a measure to stop a 100 percent increase in subsidized student loan rates. 

Roughly seven million college students are taking subsidized federal loans this year. Subsidized loans are interest-free while a student is in school. After the College Cost Reduction and Access Act passed in 2007, subsidized loans also had lower interest rates than unsubsidized federal loans.  

That act expires July first, so any loans taken out after Monday will be subject to a 6.8 percent interest rate instead of the current 3.4 percent. 

Subsidized loans are intended to help middle and lower income families attend college.  Friday's failed legislation means many students are facing an uncertain future. 

"It's really unfortunate because I'm already thinking I'm probably going to have to be paying those loans until I'm like 40," said college senior Maddisen Mosser. 

Mosser already has about $50,000 in student loans, but she knows it's a necessary investment. 

"You pretty much don't have an option put to go to school and it's impossible to pay for it; you can't pay for it yourself," said Mosser. 

"So many people try to differentiate themselves now that I almost think you need to have a degree in this day and age," said student Cody Malik, finishing up his Master's degree in Accounting. 

Even with that in mind, most students still fear the day they have to start paying those student loans. 

"I know some people that have to pay 4 or 500 a month for it and its kind of like, wow, that's a lot," said Mosser. 

"It's definitely going to decrease my discretionary spending once I do have to start paying them back," said Malik. 

It's why the thought of having even larger monthly payments is so troubling. 

"It's about another $2500 hit over a 10 year period…it definitely has an impact, but its not such an impact that you're going to look at this change in interest rates and suddenly say college isn't worth it," said Augustana's Financial Aid Director Brenda Murtha. 

"I'm developing a good set of skills that no one can take away from me, so I'm willing to pay that extra bit of loan interest or whatever I have to sacrifice to do it because I know down the road I'm going to benefit from it tremendously," said Malik.

Other students are hoping Congress will be able to come to some kind of agreement soon. 

"My need to look at what's the better good for everybody and not, o this is not the democratic way, this is not the republican belief, and lets just argue and not agree on anything," said Malik. 

When Congress returns from their July 4th break, they could make a retroactive deal that would temporarily bring back the lower interest rates this year.  It's why Murtha says students should wait to make any major loan decisions until August.

  • Kadoka man killed south of Phillip

    Kadoka man killed south of Phillip

    Friday, April 18 2014 2:43 PM EDT2014-04-18 18:43:59 GMT
    A Kadoka man died in a one-vehicle crash on S.D. Highway 73 about five miles south of Philip today. Jeremiah Iron Moccasin, 54, was northbound driving a 1981 Chevrolet K10 pickup. On a curve, the vehicleMore >>
    A Kadoka man died in a one-vehicle crash on S.D. Highway 73 about five miles south of Philip today.More >>
  • Big Sioux Falls bar fight ends with three people in custody

    Big Sioux Falls bar fight ends with three people in custody

    Friday, April 18 2014 1:56 PM EDT2014-04-18 17:56:52 GMT
    Three men are in custody after a large bar fight in Sioux Falls.It happened Friday morning around 1 a.m. at Bigs Sports Bar on West 12th Street.Sioux Falls Police say when they arrived, there were an estimatedMore >>
    Three men are in custody after a large bar fight in Sioux Falls.More >>
  • Absentee voting begins in South Dakota

    Absentee voting begins in South Dakota

    Friday, April 18 2014 1:47 PM EDT2014-04-18 17:47:02 GMT
    We're still more than a month away from the primary election, but South Dakotans can begin voting for their favorite candidates. Friday marks the first day of absentee voting for the June 3 primary. "ToMore >>
    Military and overseas voters have the option of using a new system called iOASIS.  It turns a 60 day process into less than a 5 minute transaction.
    More >>
  • Public gives a "thumbs-up" to Christian theme movies

    Public gives a "thumbs-up" to Christian themed movies

    Friday, April 18 2014 1:45 PM EDT2014-04-18 17:45:37 GMT
    Instead of sitting in a church pew this Good Friday, many people may find themselves in a different seat. Right now movie theaters are offering several Christian flicks, and people are taking advantage. ‘Noah,'More >>
    Instead of sitting in a church pew this Good Friday, many people may find themselves in a different seat. Right now movie theaters are offering several Christian flicks, and people are taking advantage.More >>
  • Long line for Eric Church tickets

    Long line for Eric Church tickets

    Friday, April 18 2014 11:24 AM EDT2014-04-18 15:24:33 GMT
    Eric Church fans showed up in force to buy tickets for the country music star's performance at the Denny Sanford Premier Center.Tickets went on sale Friday morning, and a long line formed at the arenaMore >>
    Eric Church fans showed up in force to buy tickets for the country music star's performance at the Denny Sanford Premier Center.Tickets went on sale Friday morning, and a long line formed at the arenaMore >>
  • Vermillion man dead in two-vehicle crash

    Vermillion man dead in two-vehicle crash

    Friday, April 18 2014 11:15 AM EDT2014-04-18 15:15:52 GMT
    A Vermillion man is dead after a two-vehicle crash in southeastern South Dakota.According to the South Dakota Highway Patrol, the accident happened Thursday night at the intersection of S.D. Highways 50More >>
    A Vermillion man is dead after a two-vehicle crash in southeastern South Dakota.More >>
  • Easter display for Make A Wish

    Easter display for Make A Wish

    Friday, April 18 2014 10:45 AM EDT2014-04-18 14:45:25 GMT
    A Sioux Falls family is using an Easter Display to help raise money for the Make A Wish foundation of South Dakota. Homeowner Greg Nosbush lives along 5700 S. Holbrook Avenue where he has decorated hisMore >>
    A Sioux Falls family is using an Easter Display to help raise money for the Make A Wish foundation of South Dakota.More >>
  • Man in custody after 3-hour standoff in Rapid City

    Man in custody after 3-hour standoff in Rapid City

    Friday, April 18 2014 9:58 AM EDT2014-04-18 13:58:15 GMT
    Charges are pending against a 37-year-old Rapid City man arrested after a standoff with police that lasted more than three hours.    Authorities say the Thursday afternoon standoff at a mobile home beganMore >>
    Charges are pending against a 37-year-old Rapid City man arrested after a standoff with police that lasted more than three hours.More >>
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KSFY. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service or our EEO Report.