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Pressure to pass student loan deal
GUILDERLAND -- Talk about handing in a homework assignment late. It's been weeks in the making, but it now seems that lawmakers in Washington may have finally reached a deal to bring student loan interest rates back down. It's news students and parents, have been waiting for.
But it may not come without a price.
Student loan rates would be lower come the fall. They may not stay that way past this year though.
"Prior to this potential deal student loan rates were variable, they were unpredictable," said Dennis Fagan of Fagan Associates.
It's enough to put a family's finances and a student's future in jeopardy. Stafford loan rates spiked to 6.8 percent because the feds didn't act.
"There's rules now," Fagan said. "I think that's important. Before there weren't rules."
The plan discussed now would link interest rates to market trends -- bringing them down to 3.9 percent. Andrew Genovese is in his third year at the University of Maryland. Back in Guilderland for the summer, he's planning ahead to pay off what he owes.
"I'll graduate with probably about 25 grand in debt which is a lot less than some other kids do," Genovese said.
That's the national average. 14 million people under the age of thirty in and out of school have some debt to pay. This new deal affects new loan seekers. Genovese is glad he's not three years younger.
"It would have meant I would have been a lot more cautious about my choice in college," Genovese said. "I maybe wouldn't have gone out of state, I maybe would have tried my best to get scholarships."
Any Washington deal doesn't mean the problem of paying for college concludes for anyone.
"It's something that we've still got to grapple with," Fagan said. "The rise in tuition, which has also begun to slow down, is something that has to be focused on as well."
And from one friend to another -- advice for the soon-to-be college kid from the current student, crunching his own numbers: "we're in the age kind of today where people like to spend outside of their means, rack up credit card bills, that kind of stuff but look very hard at your financial situation and don't overreach," Genovese said. "You might end up paying for it later in your life."
The challenge here is the change down the road. Since rates would be tied to markets, they would go up as the economy improves. An 8.25 percent cap would be put in place for undergraduate students under the current plan.