The roller coaster of events concerning student loan interest rate increases on subsidized Stafford loans finally came to an end on July 17.

On July 1, the Senate failed come to a decision regarding the interest rate on subsidized Stafford loans, which are offered to eligible students to help finance their studies. This led to the interest rate spiking up from 3.4 percent to 6.8 percent, causing some distress among college students.

The Senate left for vacation on July 4, without coming to an agreement on how to deal with the rate increase, effectively leaving the problem for the next meeting on July 10. This was similar to how they dealt with the issue when they froze the interest rate at 3.4 percent one year ago.

“The default position for the senate, if they did not come to a decision, was the interest rate increase, or sequestration,” said Thomas Hill, senior vice president for student affairs. “This sequestration acts as an incentive for the senate to agree before something happens that neither side wants.”

The Senate had the opportunity to come to a decision before their August recess, choosing to meet with President Barack Obama to discuss their options for maintaining a low interest rate.

“For this upcoming academic year, the interest rate for these new loans will be at 6.8 percent. Once the students graduate and their grace period expires, the interest will accrue at 6.8 percent, as opposed to accruing at 3.4 percent,” said Roberta Johnson, Financial Aid Director at Iowa State.

Because of the Senate’s decision, this will no longer be the case. Johnson said specifically what this indecision would have meant for prospective college students.

“Assuming a student will end up with approximately the same amount of debt that last year’s graduating class did, which was $14,000, they will pay $2,600 additional dollars in the long run,” Johnson said. “In terms of interest, that calculates to around $23 per month, for 10 years of payment on their student loan.”

Johnson said she still didn’t expect the enrollment rate at Iowa State to drop considerably.

This could possibly be because of many students not being fully aware of the previous interest rate increase. 

“This only affects the new subsidized Stafford loans that are being borrowed now after July 1 of this year,” Johnson said. “Anybody who had a subsidized loan before is locked in at what the former rate was when they borrowed that loan.” 

However, considering a college education today is as necessary as having a high school education was years ago, this news would have been devastating to students who are relying on scholarships and other funds, like subsidized Stafford loans, to complete their college career.