Bloomberg is reporting, “New undergraduate loans from the Department of Education are due to carry an interest rate of 4.45 percent, up from 3.76 percent for the academic year ending in June. Rates on some graduate loans are set to rise from 5.31 percent to 6 percent, while rates on loans to parents and guardians are due to experience a jump from 6.31 percent to 7 percent.”
The article goes on to say, “Higher costs to borrow from the U.S. government could help private lenders such as SLM Corp., more commonly known as Sallie Mae, and Discover Financial Services. Both companies lend to households seeking funds to pay for college, but interest rates on their undergraduate loans are generally higher than those offered by the government, according to a review of their websites. Their loans—which lack the protections afforded to Americans with federal loans who subsequently struggle to repay their debt—could be more attractive to borrowers if their rates stay steady while the feds raise prices.”
You can read the full article here.