VSAC Eyeing Student Loan Interest Changes

VSAC Eyeing Student Loan Interest Changes

Loan interest rates are likely to decrease as Washington works on a deal but they might not last long.

UVM's recent grads with loans know what they'll be paying in interest but for current students that's still up in the air.

 

“Given all the uncertainty it’s left us saying here's what we're expecting to be but we don't know yet,” Marie Johnson said.

 

Johnson is Director of Student Financial Services at UVM and has been trying to explain to students what their options are and how interest rates may change.

 

“Are you planning to borrow. So this is what that will mean if that's 6.8 or this is what it'll mean if it's 3.4,” Johnson said..

 

As of July 1st new subsidized undergrad loans 6.8 percent. But since then the Senate approved a plan to bring them back under four percent even if you've already taken a loan for the coming year.

 

“So you will still benefit from that change if it's in point made,” Scott Giles said.

 

Vermont Student Assistance Corporation CEO Scott Giles has been following the action in Washington closely. He says the problem with the proposal is it's tied to national interest rates which are likely to rise in the coming years.

 

“So it's charging students a little bit more in the future in order to pay for this short term benefit. And while we don't agree with that policy we think that there are ways that one could reduce the interest rates without putting this on the back of future students,” Giles said.

 

 

Vermont Senator Bernie Sanders offered an ammendment to essentially void this deal after two years to come up with a new solution. That failed. The bill still has to pass the House and be signed by the President to become law.

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