Rate On Popular Student Loan About To Double

Source: CBS News

The interest rate for a popular federal student loan is about to double for millions of college students.

The prospects of this happening has prompted students to petition Congress to stop the dramatic rate hike. College students on Tuesday delivered petitions signed by 130,000 Americans to Congressional leaders.

The loan that is causing students to panic is the subsidized Stafford Loan, which low- and middle-income students depend upon. Currently the interest rate is 3.4 percent, but it is scheduled to jump to 6.8 percent when the new federal loan season begins July 1.

Students learn from their college or university if they qualify for a subsidized Stafford Loan after they complete the Free Application for Federal Student Aid (FAFSA). Besides the low interest rate, the federal government covers the interest payments on these loans until the borrowers have been out of college for six months.

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