Interest rates for student loans are expected to rise nearly 2% after July 1st, a study by the Project on Student Debt has concluded:
The survey found that loan debt keeps young Americans from traveling some paths that typically are associated with adulthood, such as getting married and buying a house.
"Loans are not just about four years of school," said Michael Conrath, with AllianceBernstein. "Graduates are living in a prolonged state of adolescence because the rites of passage into adulthood are on hold because of student-loan debt."
Two-thirds of college students graduate with debt, and the cost of servicing that debt is going up. Interest rates on existing student loans will rise 1.84 percent on July 1, unless borrowers consolidate into fixed-rate loans before June 30.
The Project on Student Debt estimates that the new rates will increase monthly payments by 20 percent and double the amount of interest paid over the life of the loan.
"It’s putting a burden on young people at a time when college degrees are essential in finding jobs," said Heather Boushey, senior economist with the Center for Economic and Policy Research.
"Debt levels are up, interest rates are rising, and graduates are facing a poor job market," she said. "It could have a significant impact on the economy in the long term."
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Good thing I'm almost done.