DiNapoli Tries to Curb Student Loan Interest Hike

According to a report released by State Comptroller Thomas Dinapoli, the loss of lower interest rates for federally subsidized college loans would increase borrowing costs for a student by as much as $3,800 over a 10-year period.

DiNapoli is calling on Congress to reach an agreement to keep the current rate in place. If the 3.4 percent rate remains in effect for the coming four years, a student who took the maximum subsidized Direct Loans of $19,000 over that period would incur monthly payments of $187 for ten years.

At 6.8 percent, the graduate’s monthly payment would be $219. The lower payment would equate to savings of $380 per year, or more than $3,800 over a standard ten-year loan term.

This year, student loan debt in the United States is expected to surpass $1 trillion. The problem has been particularly acute in New York State. As of 2010, average student loan debt for public and private college graduates in New York was tenth-highest in the nation, according to the Project on Student Debt. The average New York student who graduated in 2010 with loans carried debt totaling $26,271, or 11.2 percent more than the national average.