Radio news reporter confused

It drives me crazy!  This BLOG is putting me behind schedule, but I feel compelled! 

The news report was about the surge in college loans coming through Credit Unions -- with rates anywhwere between 2.75% - 9%.  True -- credit unions should be considered as a source for loan money.  What was misleading was that the reporter said, "Currently the federal loan program interest is fixed at 3.4%."

Talk about comparing apples to oranges!  The federal loan program for students is fixed at 6.8% with a current reduction to 3.4%, which has to be renewed annually by Congress and the President.  To date the rate will revert to 6.8% beginning July 1 -- unless Congress acts.

The other problem with the report is that Credit Union loans are going to be credit-based.  That means an unemployed student will not qualify for a credit union loan.  The parents may, sure.  But the federal government loan program for parents is fixed at 7.9% (not 3.4%).  It is called PLUS (Parent Loan for Undergraduate Students).

There are other options, and I invite you to contact me to learn about them all.

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