Interest Rates for Student Loans to Increase
By Caitlin Clinard

In July, the interest rate for student loans will increase, and that’s bad news for the millions of students struggling under a mountain of debt. There’s also concern that debt is influencing the kind of jobs students pursue when they graduate.

UNC-CH student Russell Papineau always wanted to be a photographer for National Geographic. But instead of studying photography in college, he’s majoring in business. When he graduates he’ll owe about $50,000 in student loans. He says financial factors played into his decision to study business.

“When students have loans and the money they owe is accumulating, I definitely think it puts pressure on them to get a higher paying job so they can pay them,” he said.

Assistant Director for Financial Services, Tony Patterson, said the interest rate for Stafford loans, the most commonly used loan for students, will become fixed at 6.8 percent. The variable rate will be about the same next year, but could go up after that. Patterson thinks having the rate locked in will be better.

“If anyone is about to graduate, they definitely want to talk with their lender -- if they’re a Carolina student, that would typically be the College Foundation -- about the possibility or the option of loan consolidation to get a fixed interest rate at the current rate,” he said.

UNC-CH student Kathryn Stuver is from Ohio, and she’ll have about $60,000 of debt when she graduates. At this point, she has other things to worry about.

“The student loans are completely separate in my mind. There’s no point in getting stressed out while I’m in school because I’m paying a substantial amount money to go to school, so why ruin the experience,” she said.

And Papineau expresses the same sentiments as Stuver. He says that there’s no point in stressing out about it and missing out on the fun of college.

Patterson mentioned one drawback to the fixed-rate plan: You have to start paying back the loans up to six months earlier than you would with the current plan.