Interest Rates on College Loans Are Going Up

Writer: Steve Dinnen

Welcome back to a (mostly) post-pandemic campus, kids. And oh, by the way, we should note that interest rates on all those loans you’re taking out to finance your college education are rising.

One program cited in “Kiplinger’s Personal Finance” showed a loan climbing from 2.75% to 3.73%. Loan rates are all over the board, with fixed rate loans running anywhere from 3.27% to 12.16%, depending on the lender. This is no laughing matter, considering that more Iowa college students carry debt loads than the national average, and at a slightly higher rate. And high net worth families take note: The highest-earning 40% of households carry 60% of the nearly $2 trillion student debt load.

The best way to beat these long-term financial burdens (repayment periods often top 10 years) is, obviously, to try to keep debt to a minimum. Maybe an after-class job will help–employers are begging for workers. Financial aid from your school tamps down debt as well. Educators seem more open to this, with schools like Drake University granting some sort of scholarship, averaging $26,992, to 100% of its students. Drake’s 2021-22 tuition is $45,734, and it guarantees it will lock in that rate for your next four years.

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