by Allison Linn CNBC
Students who are scrambling to find an alternative to those government-subsidized student loans that recently got a lot pricier may not want to waste too much time on the effort.
Even at the higher interest rate that recently kicked in, experts say a subsidized Stafford loan is still one of the best deals around.
“If that person looks for a loan on the private market, they’re often not going to find anything close,” said Heather Jarvis, an attorney and student loan expert.
On Wednesday, the Senate again failed to strike a compromise to temporarily keep the rates on the government-subsidized Stafford loans from doubling to 6.8 percent, from 3.4 percent previously. Some lawmakers are pushing for a long-term plan that would tie student loan borrowing rates more closely to market rates. That could potentially save the government money.
Unless a new deal can be reached, the impasse means that students who take out new loans will expect to pay the higher interest rate.
That’s left students, including Kelly Binns, in a bind.
Binns, 19, is relying student loans, a small scholarship, help from her parents and income from a summer nanny job to finance her degree in history from Colorado Mesa University in Grand Junction, Colo., She is also completing a concentration in secondary education and hopes to be a teacher.
Binns used subsidized Stafford loans last year and is planning to use them again this year despite the rate increase.
She doesn’t relish paying more, but she’s also finding it difficult to snare any additional scholarship money. Her student aid office also has advised her that adding private student loans might not make financial sense.continue reading »