Student Loan Interest Rates To Double

Interest Rates To Double On New Student Loans

 

 

 

” This higher rate will apply only to new subsidized loans taken out starting this month. Unsubsidized Stafford loans, in which the borrower pays the interest, have been at 6.8 percent for years.

Students with subsidized loans typically graduate with $9,000 in this type of debt, and the doubling of the rate means they will pay $216 more a year in interest, said Mark Kantrowitz, senior vice president and publisher of Edvisors.com, a network of educational resources for parents and students.

Student loans faced a similar interest-rate crisis last year, but Congress eventually agreed to maintain the rate at 3.4 percent for another year. Financial aid directors had their fingers crossed that something similar would happen this time.”

 

 

 

 

 

 

 

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Who Does The Fed Serve ? Why Banks And Government , Who Else ?

Who Benefits From The Fed?

 

 

 

 

” In this article I want to point out who has benefited from the Fed’s operations over the past year.

There has been a lot of discussion about the large increase in reserves, and especially excess reserves, held by the banking system. Mostly this discussion is couched in terms of the increase in the money supply. While the increase in excess reserves—less than $2bn in August 2008 to almost $1.5 trillion at the end of 2012—does represent an increase in the money supply, some rule changes accompanying the crisis also signify that they are part of a bailout. One aspect of the Fed’s crisis response was to commence paying interest on required and excess reserve balances. (The required reserve is the amount of money banks must hold to meet the minimum reserve requirement on deposits, and excess reserves are any amount held in excess of this minimum.)

 

As we review the Fed’s operations in 2012 we see the usual outcomes. The banking sector has benefited from its operations (unusually so, thanks to the continued interest on reserve policy) and the government has received a free lunch by having a ready buyer for its ever-increasing debt, especially long-term debt, which might otherwise be susceptible to inflationary pressures increasing its interest yield. Let’s see what surprises the Fed has in store for us in 2013.”

Piss Poor Budgeting

Heritage Foundation