Yes, it's apparently 529 Day, that august event celebrating the tax-advantaged college savings plans known as 529s. Not sure who started this May 29th tradition, and for many parents and students, there's not much to celebrate about higher-education tuition. As college costs continue to mount, aggregate U.S. student debt is about $1 trillion.
Starting July 1, unless Congress acts, rates on new federally subsidized Stafford Loans for undergraduates will rise from 3.4 percent to 6.8 percent. That would affect more than 7 million students, this Bloomberg story reported. A bill making its way through the House would peg new student-loan interest rates to yields on the 10-year Treasury note, meaning that the rates would fluctuate. It would also set maximum caps on those variable rates. The Senate leadership opposes it, preferring to extend the current Stafford rate for two years.
In addition to subsidized Stafford loans, on which interest doesn’t accrue until after a student graduates, the measure would affect rates for unsubsidized Stafford loans, which are available regardless of financial need. The Bloomberg story noted that Plus loans, which are available to graduate students and parents of undergraduates, would also be affected. The current rate for unsubsidized Stafford loans is 6.8 percent; for Plus loans, it's 7.9 percent.
Whatever the outcome, it's likely you're going to pay more to finance higher education. Don’t forget to send a card.
Related news from the Ventured&Gained blog: Extreme Saving: A Man, His Van and Five-Figure Debt