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How rising student loan interest rates could affect college-going behavior

September 29, 2023

The interest rates on new graduate loans from the U.S. Department of Education now top 7% while those for undergraduate loans have reached over 5%, the highest levels they’ve been in over a decade.

That’s partly because the Federal Reserve has been combating elevated inflation by raising its benchmark interest rate to the highest level in over two decades. This has indirectly made the cost of borrowing money through all sorts of avenues more expensive, which typically makes loans less attractive to individuals and firms.

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