Price Report: Federal Student Loans Increase This Summer

Under a 2013 provision from President Obama, federal student loan interest rates will rise beginning July 1. The new rates will likely add several hundred dollars in interest during the life of a student loan.

Beginning July 1, undergraduate loans from the federal government will increase by 0.69 percentage points to 4.45 percent. Graduate loans will increase from 5.31 to six percent.

Under the new rates, a $10,000 federal student loan will cost about $400 more. Over the life of a student loan, which is typically 10 years, that equates to a few extra dollars of interest per month.

This will not affect private student loans, which typically have a slightly higher interest rate than government-backed loans, but private companies could be more likely to increase their own rates or bring students out from the federal loan blanket and into the private loan market.

In 2013, the Obama administration worked with a Republican-majority Congress to reform the federal student loan interest rate and tie it to 10-year Treasury yields. Before 2013, Congress set a fixed rate for federal student loans.

The loan interest rate has been at historic lows since the 2008 financial crisis.

The increase does not affect existing loans, just those that are taken out after July 1.

Crop prices (May 22)

Rio Creek Feed Mill – Algoma

Fox River Valley Ethanol – Green Bay

Basis:  The difference between the local cash price for a commodity and the Chicago cash price (where the Board of Trade sets national futures price).

Gas Price Averages

United States:  $2.36

United States one year ago:  $2.28

Wisconsin:  $2.33

Wisconsin one year ago:  $2.31

Northern Door:  $2.33

Sturgeon Bay:  $2.33

Other Commodities

Gold:  $1,260.30/troy ounce

Silver:  $17.14/troy ounce

Oil:  $51.04/barrel

Sources:  aaa.com, agweb.com, gasbuddy.com, money.cnn.com, Forbes, Bloomberg, MarketWatch