Interest Rates on Student Loans Could Jump
Lynchburg, VA - Many high school seniors are busy finalizing their college plans - where to go, what to study, and one big one for almost everyone is how to pay for it?
Monday, we sat down with a financial aid advisor, and it didn't take long for sequestration to come up. Sequestration means less grant money floating around for students. That means students are likely to take out more loans, at a time when interest rates on those loans could skyrocket.
Candy Jones is a Human Resources major. Other students have told her horror stories about student loans. But she didn't get scared; she got educated.
"Working in financial aid, I've learned a lot," said Candy Jones, junior, LC.
Last year, Jones took a job in financial aid at Lynchburg College. Yes, like many in college, she'll have student loans to pay back after graduation. But, the debt isn't holding her back from her dream job in human resources.
"I'm not picking a job that pays the most money. I'm actually picking a job that I actually want to do. Somebody told me one time, 'If you're not whistling on your way to work, then you need to get a new job,'" said Jones.
"The support for financial aid is always in question," said Michelle Davis, director, financial aid office.
Michelle Davis runs LC's financial aid office. She says this past election, politician's kept things affordable for students, putting off hiking the interest rate on student loans for another time. Well, that time is now, and talks have started. Interest rates could double from 3.4% to 6.8%. A jump like that won't hit the class of 2013. But Davis says younger students should be on guard.
"It's my new students who need to understand what this means for them four years from now," said Davis.
Davis hopes Washington keeps the lower interest rate a bit longer. Still, for Jones, student loans will not keep her from earning a degree.
"I just see my student loans as an investment," said Jones.
Loan forgiveness is another hot topic. One idea floated is to forgive student loan debt after 10 years of on-time payments.
Most students on a typical payment plan will have paid off their debt in that time.