A popular student loan program from the federal government is about to see rates double for millions of holders of the student loan. The Stafford Loan, which currently charges a 3.4% interest, is set to skyrocket to 6.8% interest on July 1.
The student loans known as Subsidized Stafford Loans are awarded to students based on financial need; the FAFSASM (Free Application for Federal Student Aid) applications are reviewed by schools, who determine the amount an applicant can borrow. Students with these loans are not charged interest while in school.
The non-subsidized version of the Stafford student loan has seen a 6.8% interest rate for some time. The prospect of the subsidized student loan being bumped up in rate has resulted in a petition drive to Congress seeking to keep the rate lower, which according to CBS News have been signed by 130,000 citizens.
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