Student loan interest rate goes up, affects Arizona grads
PHOENIX -- Today's college graduates are leaving school with the highest amount of student loan debt in history -- and they won't be getting any breaks on interest.
Financial planner Joe Gleason in Surprise, Ariz., said with the start of the 2015 fiscal year on Tuesday, interest rates for student loans took a jump.
"The move today (Monday) was about a point," he said. "So, basically, with these interest rates going up, it's going to increase the amount of payments that people are making to pay them back."
Rates moved from 3.86 percent in Fiscal Year 2014 up to 4.66 for Fiscal Year 2015.
For Arizona graduates, Gleason said that means the average college graduate will pay roughly $100 more per year.
"A lot of kids have student loan debt. Here in Arizona, it's about $20,000 per student, on average," he said. "So if they go to pay that back, it's just going to increase those payment amounts."
Gleason recommends new graduates first take an inventory of all their loans.
"Understand your debt (and) that's not just necessarily student loans," he said. "That would include credit cards, that would include any car notes, (and) if they have a mortgage."
He said people should then look to pay down the loan with the highest interest rates.
"If they've got credit cards with double-digit interest rates, pay more toward those," he said. "Maintain the minimum on some of the lower credit cards or the student loans."
Gleason also recommends staying in touch with lenders, in case students are not working right out of school or need help paying their loan.