Student Loan Interest is DOWN to Record Lows | MILLENNIAL EXPLAINS | Summary and Q&A

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May 14, 2020
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Debt Free Millennials
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Student Loan Interest is DOWN to Record Lows | MILLENNIAL EXPLAINS

TL;DR

The interest rates on federal student loans have decreased, with undergraduate Stafford loans at 2.75%, providing an opportunity for borrowers to pay less in interest.

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Key Insights

  • 🥺 The decrease in interest rates on federal student loans is beneficial for borrowers and can lead to significant savings in interest payments.
  • 🧑‍🎓 Strategies such as the debt snowball and avalanche methods can help accelerate the repayment of student loan debt.
  • ☠️ Graduates with existing student loan debt will not experience any changes in their interest rates.
  • 🧑‍🎓 It is important to explore alternatives to student loans, such as scholarships and cash payments, to minimize the need for borrowing.

Transcript

hey guys it's Justine with debt-free Millennials and I'm coming at you with some new information that actually my mom emailed to me about student loan interest so CNBC just released an article that said the ten-year Treasury notes are down which means it has a little bit of a correlation to what the interest rate is on the federal student loans so ... Read More

Questions & Answers

Q: How have the interest rates on federal student loans changed?

The interest rates on federal student loans, such as undergraduate Stafford loans, have decreased to 2.75%, providing borrowers with a lower interest burden.

Q: Will these interest rate changes affect existing student loan debt?

No, the interest rate changes only apply to new student loans. Existing loans with fixed rates are not impacted by the decrease in interest rates.

Q: What strategies can be used to pay off student loan debt quickly?

Two popular strategies are the debt snowball and the avalanche method. The debt snowball involves paying off the loan with the smallest balance first, while the avalanche method focuses on the loan with the highest interest rate.

Q: Should students consider paying for tuition in cash or scholarships before taking out student loans?

Yes, if possible, it is advisable to explore options such as scholarships or paying in cash for tuition. This can help minimize the need for student loans and avoid accruing interest.

Summary & Key Takeaways

  • The ten-year Treasury notes have decreased, leading to lower interest rates on federal student loans.

  • Undergraduate Stafford loans will have an interest rate of 2.75%, the lowest in recent history.

  • Graduate loans and PLUS loans also experience decreased interest rates.

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