April 15, 2014

CFPB: Federal student loan rates to rise

April 16, 2014 – The CFPB says interest rates on new federal student loans are expected to "jump" this summer and has updated its online "Paying for College" tool to help estimate what rates might be like after July.

A chart on the CFPB's website shows the current rate for direct subsidized and unsubsidized loans for undergraduate students is 3.86 percent; the chart estimates that after July the rate for new loans will be 5.09 percent. Rohit Chopra, the bureau's assistant director and student loan ombudsman, said in a blog post that graduate students who borrow after July will pay an additional $1,400 over 10 years while repaying their loan as a result of the rate increase.

"Right now, many students and families across the country are receiving financial aid offers and deciding how to pay for college," Chopra said. "Most students will need to shop for student loans now, and some of you have asked us what the new rates will be."