Yesterday became the day that college students were dreading as the interest on federally subsidized Stafford loans doubled to 6.8 percent. While students are screwed, Sallie Mae (who J. Cole deftly rapped about avoiding on "Dollar and a Dream ll") stands to benefit from this.
Sallie Mae spent $1.23 million in the first quarter of the year lobbying to Congress in support of the increase. The company made $2.5 billion off loan interest last year, and will make more assuming that higher interest rates send loan seekers flocking to them for assistance.
There's almost a bright side for students here. Most of them don't take out loans in the fall, giving Congress enough time to lower the interest rates. Also, the higher interest rates will not affect current and former students who are already drowning in debt.
Hopefully, when Congress returns from their July 4 break, it will make good on its promise to slash rates.
[via Gothamist and CBS New York]
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