Borrowers taking out new federal student loans next year could see rates go up
For the bulk of student loan borrowers, the Federal Reserve’s announcement Wednesday that it would increase interest rates by one-quarter of a point (and it signaled that it would raise rates two more times in 2017) isn’t a reason to panic.
The interest rates on federal student loans — which account for more than 90% of outstanding student loan dollars — likely won’t be affected by the Fed’s rate hike because all federal student loans issued since the 2006-2007 academic year have a fixed interest rate. “Your existing loans will not change,” said Mark Kantrowitz, the publisher of Cappex.com, a college and scholarship search site.
But students who plan to take out a federal student loan...