Deadline Approaches For Student Loan Rate Limit - NBC4: Columbus, Ohio News, Weather, and Sports (WCMH-TV)

Deadline Approaches For Student Loan Rate Limit

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COLUMBUS, Ohio -

Time is running out on an extension that keeps undergraduate student loan rates at less than 3.5 percent. What is being done to try and fix the issue?

President Barack Obama was in the Rose Garden Friday, asking Congress for a way to prevent an increase on interest rates on student subsidized loans.

Students at The Ohio State University said they are worried about the possibility that their rates could double. Experts said that if the rate doubles, it would cost a student borrower $1,000 for each year of college over the life of the loan.

After June 30, students could see a rate increase from 3.4 percent to 6.8 percent, which is something students say they could not handle.

"I have just been so broke with this whole student loan thing for so long. I have money but it's funneled into an account to pay off these student loans," said student Sean Martin.

"Can you imagine if it doubles? We will be in loans forever, even when we send our kids off. I don't want that," said student Charlie Kleptz.

The House has already passed a student loan plan which would move student's interest rates to a variable rate and would keep interest rates low. Congressman Steve Stivers (R) said it's a step in the right direction, but more should be done.

"We don't do car loans through the government. We don't do a lot of other loans through the government. The subsidies would still be there for student loans that the government provided. But I think we need to move this out of the government and back into the private sector over time," said Stivers.

Professor Sherman Hanna with Ohio State said that even if the student loan rates would increase, it is still a bargain compared to other interest rates like credit cards.

Hanna said that most students who graduate from Ohio State usually have amounts of debt that they can handle.

Hanna said the bottom line is that students need to plan.

"Do your homework and take advantage of the government loans first because those have better terms and just research the alternatives," Hanna said.

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