ANDERSON, Ind. — There could still be a retroactive fix if Congress acts after the July 4 holiday, but as they stand now, subsidized Stafford loan interest rates are set to double in the fall.
The interest rate on the student loans, accounting for roughly a quarter of all direct federal borrowing, went from 3.4 percent to 6.8 percent Monday with inaction from Congress.
The thought of more debt is a frustrating one for students like Dylan Snell, who'll be taking classes at Ivy Tech Community College in the fall.
Even though Snell, a 2013 graduate of the Anderson Excel Center, will have grants to pay for a significant part of his schooling, he said he's still discouraged by the rate increase.
"If you want to be educated, you should have the opportunity to do so and not be in debt for the rest of your life," he said, adding that one needs a degree beyond high school to be successful in today's economy.
Snell has friends struggling to repay student loans and knows an Anderson University graduate nearly 30 years old who has only paid off half his debt.
Snell said he's already earned college credit for no cost at the Excel Center, but he added that he wants to live comfortably and not worry about stretching his finances to make it day to day.
With the interest rate increase, Congress' Joint Economic Committee estimated the cost passed on to students would be about $2,600 with a four-year degree. The average debt of a four-year college graduate in the United States is already about $26,600, according to the Project on Student Debt.
Student debt has risen significantly to about $1 trillion today, surpassing credit card debt nationwide.
"Awareness is key," said Tammy Tomfohrde, director of financial aid for Ivy Tech's East Central Region.