Saturday, July 30, 2011  Debt Ceiling Fiasco and Student Loans
As AEM has been reporting, the debt ceiling disaster will have a
direct effect upon interest rates on student loans. On the floor
today, Senator Harkin called the situation a "manufactured
crisis." That is true, and pathetic, because millions of
Americans will, undoubtedly, pay a price. Most politicians on
the floor are now confirming that a downgrade is probably
inevitable.  Reuters has put out a great piece on how a fallout
from a downgrade will effect average Americans, and one of the
questions they had was this:  Will interest rates on mortgages,
car loans, student loans [my emphasis] and credit cards rise?
The answer: Yes. Like any average Joe or Jane who misses a
credit card payment, the United States will be socked with
higher borrowing costs if it defaults on its debt. If the
country loses its coveted triple-A rating, which is expected to
happen, the cost to service its debt will probably rise. And
that will have a significant ripple effe