Millions prepare to pay thousands more in student loans - WAFB 9 News Baton Rouge, Louisiana News, Weather, Sports

Student loan rates double overnight

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CINCINNATI, OH (FOX19) -

As July rolls in, more than 7 million students nationwide will notice an increase in student loan rates.

With the transition from  June to July, student loan interest rates doubled overnight. As of midnight, student loan interest rates increased from 3.4 to 6.9 percent.

Despite several bills being introduced as a solution, Congress has left them untouched as they head to a week-long recess for the July 4 week.

Congress agrees that something needs to be done, but they cannot agree on what. Senate Democrat leaders are pushing to extend 3.4 percent rates for another year. However, Republicans want to see a long term solution such as low rates now, but a rise with market rates in the future.

FOX19's Kelly Rippin details a few facts about student loans that may surprise you.

  1. Co-signers can suffer just as much as the person who is taking out the student loan. A missed payment or a default will equally affect a cosigner.
  2. Student loans can keep you from home ownership. It affects your debt income ratio and you may not qualify for a mortgage loan.
  3. Bankruptcy is rarely an option. In the 1970s, Congress passed a ban that would ban federal student loans from being discharged in bankruptcy

Student loan debt is the second largest debt that consumers carry. Student loans are second to mortgage debt. In 2010, student debt loans rates hit the $1 trillion mark of outstanding loans. 

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