WASHINGTON (AP) - Interest rates go up Tuesday for students taking out new federal loans. This hike is relatively minimal but could foreshadow more increases to come.
The change stems from a high-profile, bipartisan deal brokered last year by Congress and signed by President Barack Obama that ties the rates to the financial markets.
Interest rates go from 3.86 to 4.66 percent on undergraduate Stafford loans. Graduate student loans go from 5.41 percent to 6.21 percent. Interest rates on Plus loans for parents go from 6.41 percent to 7.21 percent.
The average borrower under the hike will pay back about $4 more every month for every $10,000 owed. That's about the price of a fancy latte.