July 1st was the deadline. And now, regardless of fault, the student loan interest rate doubled. It used to be 3.4% (but who had that?) and now it’s 6.8%.
What do we do now?
Do we even know what that means?
I’d argue that we don’t really know what that will mean. What kind of impact that will have.
It worries me, though. We talked a few weeks ago about how the average student loan debt is $24,000.
So, let’s look at that in your favorite online calculator. The one I looked at was from FinAid.com, and for the sake of argument, I used the average.
At 3.4%, over the lifetime of the loan (again, using the standard ten year term), a graduate would pay just over $4,300 in interest alone.
That sounds like a lot. In fact, I’m not sure my car is worth much more than that.
But that was last week. Now?
The graduate would pay almost $9,200 in interest alone.
That is certainly worth more than my car.
Interestingly, the monthly payment isn’t all that different.
In fact, it’s $236 in the “olden days” — and $276 today.
The sad thing is, most people won’t even notice that.
We need to be more conscious in our finances, friends! Because… well, that’s a lot of money in ten years.
Are you worried about this?
Should we be?
What if you have way more than the average?
Kids of all ages: goodness gracious, please … if you get nothing else from this …
Pay more than the minimums!