Student Loan Interest Rates
FULTON - This week current students at William Woods will get their financial aid letters. The letter will offer students scholarships and federal loans. For students having to take out Stafford loans, paying it back will be a little bit harder; if Congress doesn't act by July 1st, the interest on the loans will double from 3.4 percent to 6.8 percent.
"I get $4,000 from Stafford Loans this year. Last year was 10,000. This year will probably be about $8,000," said William Woods junior Darian Lightfoot. She estimates by the time she graduates, she will have $65,000 in federal and private loans.
Sixty-seven percent of students graduate with loan debt, the average amount being $23,800 in 2008, according to the Project on Student Debt, which is the most recent data available. The default rate has risen over the last few years, from 7.0 percent to 8.8 percent from 2008 to 2009. For public universities the default rate increased from 6 percent to 7.2 percent. Private institutions have seen an increase from 4 to 4.6 percent while default rates for-profit schools are up from 11.6 to 15 percent.
William Woods, a private university, has the lowest loan default rate out of all Mid-Missouri colleges, 1.6 percent. Mid-Missouri schools as a whole a far below the national average.
Darian Lightfoot has been preparing herself to avoid default. She has private and federal loans, including a Stafford student loan.
"I have four jobs. I am putting that into my savings and budgeting. I have two majors, so if my first one doesn't work out, I have another one to fall back on," said Lightfoot.
William Woods also helps prepare their students. Lightfoot says William Woods has a good job at preparing students for the real world with their different programs. Lightfoot will determine her finances this week and then will take out more federal and private loans.
"Loans aren't scary, you'll find a way to pay them off," said Lightfoot.
Congress is searching for a solution to the problem.