Watching Your Wallet: Student loan interest rates increase

Federal rates see 34% jump
Published: Jun. 22, 2022 at 1:35 PM EDT
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InvestigateTV - Federal student loan interest rates are set to rise on July 1, the official start of the 2022-23 academic year. The rate, which was 3.73%, will see a 34% hike to 4.99% for undergraduate student loans.

Cherry Dale, a financial coach with the Virginia Credit Union, said you’ll also pay more for private student loans

“Because the Fed are raising rates across the board, you could have multiple loans with different interest rates,” Dale said.

She said if you are forced to take multiple loans to pay for school, consolidating as you near graduation could lock in a better interest rate.

Dale said if you need to pay for school, it’s a good idea to rely on aid you don’t have to repay first like scholarships, grants and other federal financial aid.

She also added that if you still need additional funds, it’s usually best to take out federal student loans over private.

One thing to note as the Fed continues to look at rate increases, fixed-rate private student loans will not have a similar change because the rate is set.