KANSAS CITY, Mo. - If you use student loans to help pay for college, it will soon cost you more money.
"For some students, it's the make or break of them going to pursue their education," explained Dena Norris from Metropolitan Community College. "So while our community college tuition is very affordable, often there are other costs that go into factor of living expenses, childcare costs, your transportation. You have to figure out how to make all of those ends meet."
The reason for the higher cost, explained Norris, is the Treasury Department. Students who take out new loans between July 1 of this year and June 30 of next year will pay an interest rate of 4.45 percent, up from 3.76 percent.
"In the grand scheme of things, if you look at your monthly payment, it may only be a difference of $4 or $5 a month, but over the whole life of that 10-year loan, you are looking at paying an extra $500 to $1,000," she said.
Which is why MCC urges students to look into scholarships and grants before approaching loans. Norris often helps students figure out what private and public loans they may be eligible for.
"Instead of taking loans, I think scholarships are beneficial," said Jasmine Patel, 21, who will transfer from MCC to the University of Missouri - Kansas City this fall. "You don't have to pay off scholarships. We do research papers - like how you have to dig deep to find the main points. It's the same thing to get scholarships so you can get free money. I did that and now I have all the financial help that I need."
Another tip from MCC in the wake of the interest rate increase -- instead of taking on all of the loans you are approved for, only take the money you actually need.
Graduate students are also affected by the Treasury Department's decision. The interest rates for those loans will increase from 5.31 percent to a solid 6 percent on July 1, 2017.