Students across the country needing government-subsidized Stafford loans could feel the pinch July 1 — paying about $1,000 more a year in interest — if Congress doesn't act soon.
Any undergraduate student taking out new subsidized loans after July 1 would be affected, which means about 7 million students nationwide.
With student loan debt already at an all–time high, local experts say graduates will have to start making some life changes in order to keep up with the payments.
"It may impact the choice of a career that they pursue," UNK Financial Aid Director Mary Sommers said. "Rather than pursuing a career perhaps in the public sector where they pay might not be so good, students will opt to take a job in the private sector where they feel they can earn a salary that will allow them to repay their student loans successfully."
The House proposal would cap interest rates at 8.5 percent for students, while President Barrack Obama's measure has no cap but does include plans for a new repayment program which would limit monthly loan payments to 10 percent of the students' annual income.
Congress will be debating the options in the coming weeks, but many experts are saying it's not looking good for students.
Not only would students be faced with bigger student loan balances, but local officials say the jump in rates could be detrimental to Nebraska's economy as a whole, forcing many well–educated professionals to relocate in order to pay off their massive debts.
"Do students leave Nebraska if they've accumulated student loan debt at a pretty high rate and they need to be in a place where they can earn a higher salary to be able to afford their student loan repayments?" Sommers said. "Would they choose to leave Nebraska because of that? We don't know that for a fact, but instinctively we kind of think that may be definitely a factor."