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Rules About To Change for Federal College Loans
CEDAR RAPIDS, IA (CBS 2/FOX 28)--
If you're in college or headed there, here's some disturbing news.
A new survey shows Iowa is sixth in the nation when it comes to student debt and another finds that nearly 11 percent of those loans are delinquent.
Starting July 1st, the interest on the most common federal loan will jump nearly three and a half points.
Finals are almost done, acceptance letters have arrived in the mail and now many students are trying to get a loan or loans to pay for college.
Julia Cuvelier is one final exam away from completing her sophomore year.
Getting ready for next year she applied for a loan and was ready to go until learning today the interest rate on that loan is about to go up.
"I actually wasn't aware of it until I got the call. Had I known, I think I would have made different decisions," she said.
In 45 days new federal regulations will change the college financial landscape.
Loans will come with higher interest rates.
There will no longer be a six month grace period so students have to start paying those higher rates sooner.
Graduate students will see an even further cut in the number of subsidized loans and the new regulations will make it tougher for them to qualify for certain loans.
Those are just some of the reasons financial aid advisors say students need other options
"Borrowing student loans to live off of is a last resort. If it's necessary then you need to do it," said Mindi Bucklin, financial advisor at Mount Mercy.
The Iowa College Access Network, a non-profit organization helps students of any age try to find a way to pay for college say the need for that college degree is more important than ever.
"By 2025 we're looking at 65 % of the jobs out there will require more than high school diploma and that number keeps growing every year," said Brittania Morey, ICAN Director of Communications.
"College is worth it, not only for the education you gain, but the people you meet, the friends that you have, the experiences you gain," Cuvelier said.
For anyone looking for some help or advice about college loans, the ICAN College Planning Center is open Monday to Friday in Cedar Rapids and their service is free.