CONWAY, SC (WMBF) - As of July 1, all new Stafford Loan interest rates are 6.8 percent.
The deadline for Congress to reach an agreement on a reasonable student loan interest rate was July 1, but they failed to do so before heading on their Fourth of July recess.
The rate increase will affect seven million college students nationwide, and 70 percent of the students at Coastal Carolina University who receives some sort of financial assistance.
The University says it's hopeful a deal can still be reached.
"Most people speculate that Congress will swoop in again, and they can sign a bill and make it retroactive through July 1," says a hopeful Gregory Thornburg, VP of Enrollment Services.
But with $3.6 billion in revenue reported to be made by the increase there's no telling what will happen. Over the past two decades college students have racked up some $3 trillion in student loan debt. This latest move has at least one student worried, and as a result Casey Cameron is changing majors.
"I had to change my major from education to mathematics because I know I'll be paying $1,000 a month in loans and I'm not going to have enough money if I become a teacher," Cameron said.
There's not much Coastal can do about the increase but the university says it will help students manage their loans by continuing to offer a Money 101 presentation during orientation. Thornburg says the situation adversely affects the way people view higher education.
"It's harder to scare the current students they are in college, and they are happy where they are at because they know the value of an education, but it's the 17 and 18-year-olds that can be convinced not to go to college," Thornburg explains.
The rate increase affects all new Stafford loans.