DURHAM: Students face mounting debt as loan rates on the rise - WNCN: News, Weather

College students face mounting debt as loan rates on the rise

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Duke University holds its commencement ceremony at Wallace Wade Stadium. Duke University holds its commencement ceremony at Wallace Wade Stadium.
DURHAM, N.C. -

Bad news for college students taking out loans. New interest rates are in and they are higher.

It's an expensive reality that was on the minds of some Duke graduates as they considered their future. Stephanie Jones took out loans to attend college, and she said she'll take out more to attend medical school later in the year.

"It's very concerning," she said. "Especially when I'm looking at doing a professional degree in something that's very important because medical school is so expensive. Loans are a very, very important part of pursuing that goal."

The rate increase is expected to impact approximately 7 million undergraduates who took out subsidized loans for the 2013-14 school years.

The new rates are up nearly one point. That means Stafford Loan borrowers will pay about $46 more per year for each $10,000 borrowed.

Undergraduates will now be paying 4.66 percent (up from 3.86 percent). Graduate students will pay 6.21 percent (up from 5.41 percent). Plus loans have risen to 7.21 percent (up from 6.41 percent).

"Last year congress actually tied the rates for student loans to the U.S. Treasury," said Asset Protectors and Advisors President and CEO Tom McDermott. "So the U.S. Treasuries are effected by the market. So as the U.S. Treasury goes up, so will your student loan cost. And where do we all expect interest rates to go in the future, but higher?"

McDermott said student loans have a bigger impact on us than we realize, so it's important to keep them in check.

"Stay in state," he advised. If you're in state, it's roughly 50 percent less than going out of state."

Another tip McDermott offered is attending a community college. Most of the classes students take in the first two years can be taken at a community college for a fraction of the cost.

Taking online courses is also another option. According to a study from Fidelity, more than half of parents expect their kids to take online college course.

Finding scholarships can help lower college costs too.

U.S. Senator Elizabeth Warren recently introduced a proposal that will let student borrowers with high interest refinance their debt with the old rates.

Education debt in the nation is around $1.2 trillion.

Copyright 2014 WNCN. All rights reserved.

Shumuriel Ratliff

Shumuriel, a North Carolina native, is thrilled to be back in the Tar Heel state as a general assignment reporter for WNCN.
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