With the student loan interest rates set to double in July, time is running out for congressional leaders to make a decision about extending the current bill. As many decisions begin to surface as front running issues during the gear up for the election, some are simply ignoring some of the more time pressing matters. The Senate met this week to discuss the impending hike in student loan interest rates, but failed to reach a decision.
The near $1 trillion student loan interest rate has plagued our nation’s young adult population over the last few years. As more graduates are forced into financial insolvency, the issue has become a matter of need rather than desire. For many, the failure of the Senate to reach a decision regarding the fate of their loans comes as a huge disappointment. Although the Senate is set to reconvene in June to discuss the matter once again, many students are beginning to review their options for dealing with student loans before they become a debt burden.
Taking Care Of Business
The increase in student loan interest rate is likely to significantly impact the financial lives of many loan holders. Increasing the interest from 3.8% to 6.4% is quite a jump, one that could inflate monthly payments by hundreds of dollars. Unfortunately, filing for bankruptcy is not an option if these payments were to lead to student loan debt. However, there are a few things that can be done to avoid the need for debt relief.
- Contact the lender about interest rates prior to the July 1st deadline to see if you qualify for a lower rate.
- Discuss the rate inflation and its likelihood of impacting your financial situation.
- Review forbearance options and see if you qualify to receive assistance if the rates go up.
- Begin budgeting to accommodate the possible increase in payments after July.