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Student loan shenanigans: Q&A

By Megan Crepeau, For RedEye

3:08 PM CDT, May 3, 2012

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So, college students, how does it feel to be so darn popular? Are your ears burning? Do you hear sound bites about "student loan interest" and "rate hikes" and "Stafford" and "1 trillion" and "deadlock" and think, hey, maybe I should pay some attention to this?

Well, you should. Here's your crash course on the current student loan shenanigans in Congress, and how they might affect you … or not.

Q: So what's this I hear about student loan shenanigans in Congress?

A: Oh, it's super fun. Back in 2007, they passed a bill reducing interest rates on subsidized federal Stafford loans. It's set to expire June 30, unless Congress extends it. If they don't, rates could double – from 3.4 percent to 6.8 percent.

Q: How much more am I going to have to cough up?

A: Well, if you take out the maximum amount allowed for this particular loan ($23,000), you'd be paying about $5,000 in increased interest over the life of a 10-year or 15-year loan.

Q: And they can't agree on this … why?

A: Here's the killer: They DO agree on this. Republicans and Democrats both realize that students are broke and they vote. They don't want to get on your bad side.

Q: Whaaaa?

A: I know, right? It boils down to a fight over how to pay for this. Republicans want to take it out of money set aside for Obamacare. Democrats want to make rich people pay more taxes for it.

Q: I only took out private loans. Will this affect me?

A: Nope, but your interest rates are probably through the roof in the first place, so have fun with that.

Q: I've already graduated and I'm in the process of paying back student loans. Will this affect me?

A: Nope, those interest rates are fixed, so you can rest easy unless you want to go back for another undergraduate degree.

Q: How about me? I'm in grad/law/medical/business school.

A: Nope, this all only applies to undergrads, so you can go edit your dissertation or something.

Q: So this applies to every undergrad with a federal loan, correct?

A: Incorrect! This applies only to subsidized federal Stafford loans for the 2012-13 school year and beyond. It will not affect current loans, nor will it affect Perkins loans or unsubsidized Staffords.

Q: Whatever happened to that bill forgiving all student loan debt? That'll totally happen, right?

A: Aw, honey. That bill went to live on a nice farm, where it can frolic and play with its buddies Marijuana Legalization and End The Fed.

Megan Crepeau is a RedEye special contributor. She's a twenty-something college grad navigating this dumpy job market just like the rest of us.