BATON ROUGE, LA (WAFB) - More than two million senior citizens are still paying on student loans and more young people could find themselves paying more now.
Overnight, interest rates on subsidized loans jumped from 3.4 percent to 6.8 percent because Congress and the White House failed to reach a compromise. A local financial advisor says this should be a wakeup call to students for their future.
Ask any parent who wants their child to have a college education and you're guaranteed to hear one phrase, it's an investment in the future. But the present price of school is keeping some students off certain college campuses.
"Some of the kids, my son's friends, maybe not going to a four year college anymore. More going to junior colleges," said financial advisor, John Neyland.
He says the doubling interest rate on student loans is an issue.
For example he says if a student takes out the max loan of $23,000, they would pay an extra $4,600 in interest.
While the increased rates won't affect people already paying on student loans, they will affect seven million students for the upcoming school term. That's unless Congress comes up with a solution.
Students today are graduating with more debt than ever. In fact, Neyland says for the first time student loan debt exceeds credit card debt in the U.S.
"I would hate for any person in this country to say no to education because rates are going up," Neyland said.
With student debt hanging over them, he says some graduates are taking on low-paying jobs to get by. He says he recently suggested to his son, who graduated in May, to go back to school and get a master's degree. That way, he says, he will boost himself into a higher pay bracket and be able to pay on those loans.
"The biggest issue is to plan for how you are going to afford to pay that (debt) because that education can never leave you."
His advice to students: get the education, get a good job, pay on the debt and live within your means.
"They think success is spending...truthfully success is saving," he said.
The Senate is supposed to vote on a proposal next week to extend the 3.4 percent interest rate for another year.
Neyland says for those senior citizens still paying on student loans, the Federal Government is now withholding Social Security benefits for those who've fallen behind on their payments.