SLM rising - Gov't loan interest rates kept at 3.4%
For the next year, college students are assured that federal subsidized loan interest rates will stay at 3.4 percent. The White House estimates that will save more than 7 million students about $1,000 each.
Under the new law, students forfeit the six-month repayment grace period and will have to start repaying their loans as soon as they leave school. Graduate student will have to pay interest on their loans while they are in school.
In 2007, the interest rate on Stafford loans was 6.8 percent. Congress passed a bipartisan bill to cut the rate to 3.4 percent by 2011. The new law extends that rate for the next year, but the rate could rise after that.