WASHINGTON (CNS) — After finally being accepted into college, the only headaches left for students are how to fit a dorm room into a car for move-in day — and how to afford that tuition. 

On June 29, Congress voted to keep the interest rate for Stafford federal student loans at 3.4 percent; it would have automatically doubled July 1, jeopardizing the ability of many graduates to afford the loans. 

The action came after months of speculation that lawmakers would not be able to reach a compromise. The bill keeping the interest at the current level for the next year was packaged with $100 billion in federal highway funding and a five-year reauthorization of national flood insurance. 

Both political parties agreed on the importance of tuition relief, as collective student debt hit the $1 trillion mark this year, much earlier than expected, according to the Consumer Financial Protection Bureau. 

The interest rate is now set to double July 1, 2013. Undergraduates whose families show financial need can get a Stafford loan. Graduate students have been unable to get subsidized student loans since the Budget Control Act of 2011 made them ineligible. 

In addition, lawmakers eliminated the six-month grace period after graduation, during which students were not obligated to pay interest on their loan. If students are unable to cover the interest, because they are still looking for work, that could damage their credit score. 

Mark Lindenmeyer, director of financial aid at Loyola University Maryland in Baltimore, told Catholic News Service the vote was a temporary solution to a terminal problem. 

“The reduction rate is only for one year, and that is a big concern for families and students at every level. What we need in these programs is more predictability and more stability, so families are able to better plan,” said Lindenmeyer. 

Lindenmeyer also reported that the lack of relief for graduate students will affect enrollment at the Jesuit university. Loyola boasts a strong graduate program that accounts for almost a third of its students. 

“Some students who may have wanted to pursue full-time enrollment may go part time as a result,” said Lindenmeyer. “It’s just not a good situation for both graduates and undergraduates.” 

Multiple options

Janet Turner, director of financial aid at the University of Portland, Ore., finds the biggest challenge for her school is communicating to students the effects of these constant changes. The university, founded by the Congregation of Holy Cross, is among the top-ranked universities in the West. 

Turner suggested a few ways for students to keep track of their tuition payment. 

Students, she told CNS, “should be aware of the National Student Loan Data System, which can help them find information about their federal student loans, their loan services, and how much money they borrowed at each school.” 

“Loans are only one option for paying for college. Many students use a combination of savings, monthly payment plans and scholarships to help leverage the amount of debt they graduate with,” said Turner. She also encouraged families to prepare for upcoming changes to the loan system. 

Lindenmeyer cited possible changes to the federal Perkins Loan Program, providing low-interest loans to help needy students finance the costs of postsecondary education. 

Currently, a Perkins loan carries a 5 percent fixed interest rate, set to expire in September 2015, but that rate could be unsustainable. The program loans money collected from previous borrowers, but an increase in the number of loan defaults means a decrease in the number of loans available. 

One proposal is to raise the interest rate to increase collections, but an increase could risk more defaults. 

A recent Pew study found 7 percent of student borrowers have delayed getting married or starting a family so they pay off what they owe. Twenty-five percent said carrying such debt has made it harder to afford a home. 

Both Lindenmeyer and Turner recommended lawmakers come up with a long-term, stable set of loans. However, with the recent trend of congressional deadlock, major student loan legislation is highly unlikely. 

Nonetheless, some bills such as the Student Loan Interest Deduction Act of 2012, proposed in May, are slowly making their way through congressional committees. The bill would provide relief in the form of tax deductions for interest paid on education loans. 

With a grim future for federal student loans, Lindenmeyer suggested families search for competitive private loans with fixed interest rates. 

But the advice that parents might most welcome is that students should stick to the ramen lifestyle to keep college affordable. 

“Students should remember to live like students while they are in school, so they don’t have to later,” said Turner.