Planning to take out a federal student loan this fall? Prepare for a higher interest rate
CBSN
Students planning to borrow federal student loans for the upcoming school year, take note: Interest rates for new ones will tick up a percentage point come July 1, to more than 3.7% for undergraduates. This change comes as interest rates on existing federal student loans are set at zero percent through the end of September as part of coronavirus relief.
While the new rates are still close to historic lows, rates reset at the start of July every year according to a formula in federal law based on the high yield of the last 10-Year Treasury note auction in May, plus a margin depending on the type of loan. That means federal student loan interest rates will increase for all new loans distributed between July of this year through June 2022 — including those taken out for the fall semester. "There is no discretion in the setting of those rates. To change the formula, Congress would have to pass legislation, which is unlikely to occur," said student loan expert Mark Kantrowitz.Ashley White received her earliest combat action badge from the United States Army soon after the first lieutenant arrived in Afghanistan. The silver military award, recognizing soldiers who've been personally engaged by an attacker during conflict, was considered an achievement in and of itself as well as an affirming rite of passage for the newly deployed. White had earned it for using her own body to shield a group of civilian women and children from gunfire that broke out in the midst of her third mission in Kandahar province. All of them survived. She never mentioned the badge to anyone in her battalion.