GOLDEN VALLEY, Minn. - Higher education now comes at a higher prices, after interest rates went up at the beginning of the month for student loans.
Since July 1, rates on subsidized loans increased from 3.76% to 4.45%. Unsubsidized loan rates went from 5.31% to 6%, and Direct PLUS loans increased from 6.31% to 7%. Loan rates are set each year on July 1st, based on the 10-year U.S. Treasury Note, plus a fixed margin.
The rate increase will not impact those with existing student loans.
"The interest rate established for each loan you borrow is fixed," said Dan Ament, financial advisor with Morgan Stanley in Wayzata. "That said, you are eligible to refinance or consolidate your student loans if more attractive alternatives are available in the future."
According to a study by ValuePenguin, Minnesota ranks 6th in the nation for the number of students carrying education debt and the overall average balance they hold. Average student loan debt in Minnesota is $31,526.