TAMPA, FLA — The borrowing cost for student loans is soon poised to reach a 16-year high.
Financial aid expert Mark Kantrowitz told ABC News that the interest rate on a federal undergraduate student loan is expected to climb to 6.5% in July, marking its highest level since 2008. The current interest rate on a new student loan is 5.5%.
"I think it's crazy. At least for me, I am scared of how I'm going to pay it off," college student Amber Rivere explained.
Student loan debt is a fear that forced Braden Suarez to pursue other options after high school.
"I really wasn't thinking much about college just because I didn't want to get student loan debt," Suarez explained.
On a 10-year student loan of $28,000 under the forthcoming rate, the borrower will pay interest of about $10,000, which amounts to a roughly 35% higher cost for the borrower when compared with a student foregoing loans, Nancy Goodman, founder and executive director of higher-education nonprofit College Money Matters, told ABC News.
We reached out to Florida College Access to find out what conversations families should be having if college is still on the table for them.
Student Loan Calculators
"We are a statewide organization committed to increasing the percentage of our residents in Florida who have a postsecondary degree or credential, and we want to see that percentage get up to 60% by the year 2030 because that's what the economy is going to require, in terms of labor market and talent demand," Executive Director Braulio Colon explained.
Colon said families should really consider investing in saving plans like Florida Prepaid and scholarships.
"It's the largest scholarship program in the state of Florida; It's called Florida Bright Futures. Begin to look into what the eligibility requirements are for that scholarship," Colon said.
He also encourages families to apply for FAFSA to open the door for Pell Grants instead of loans.
"I think if you're going to be something major, like a doctor or lawyer, college is perfect for you. You don't have to go to college to make something out of yourself. There's a lot of options out there for you. I think it's just finding who you are and what do you want to do," Suarez concluded.
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