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Student loan interest rates are going to go up. At least, that’s what the Consumer Financial Protection Bureau expects. With the intention of helping borrowers better calculate the costs of their educations, the CFPB Student Loan Ombudsman Rohit Chopra published an explanation of what to expect.

The CFPB estimates interest rates for federal loans will rise 1.23 percentage points for loans taken out between July 2014 and June 2015. In 2013, the government enacted a student loan bill that tied federal loan interest rates to the 10-year Treasury note, and as Chopra explains in his post, a bond auction next month will determine the federal student loan interest rates.

While no one can be certain how much the rates will rise, it was pretty clear when the law passed last year that rates would only get higher as time went on. Rates differ by type of loan: Direct subsidized and unsubsidized loans for undergraduates have 3.86% interest rates through June; the Direct unsubsidized loan rate for graduate- or professional-degree students are 5.41%; and Direct PLUS loans for parents and graduate/professional students have a 6.41% rate. The CFPB projects those rates will rise to 5.09%, 6.64% and 7.64%, and they have a ways to go before hitting their caps at 8.25%, 9.5% and 10.5%, respectively.

What to Do If You’re Borrowing

Don’t get too freaked out about the expected spike in interest rates. Unfortunately, there’s nothing you can do about it, and choosing private loans over federal ones is not usually a better deal. Federal loans offer the kind of flexibility many young college graduates can appreciate when starting out, though many would argue that the terms of the loans aren’t flexible enough. Still, there are loan repayment plans and forgiveness programs that can save you money if you’re struggling to repay or are employed in a certain field, like public service.

Federal loan interest rates are fixed, meaning your payments won’t change, but many private student loans have variable interest rates. Those rates may be low when you borrow the money, but they can be much higher (and volatile) during repayment.

Given the little control consumers have over student loans, the best thing borrowers can do is make sure they’re only taking on what they need and can afford. That may mean working to find other scholarships and forms of financial aid or choosing to attend a less expensive school. Generally, it’s a good idea to graduate with a debt load that doesn’t exceed the starting salary for your chosen profession.

Higher interest rates mean you’ll pay more over time, and it’s incredibly important to stay on top of your education expenses. Student loans are very difficult to discharge in bankruptcy, and for many people student loans are some of the first trade lines on their credit reports. A student loan delinquency could seriously hurt your credit, making post-graduate finances even more challenging.

Federal student loan interest rates aren’t based on your credit score, but they will impact your credit as you repay them. You can get monthly updates on two of your credit scores with a free Credit.com account so you can keep track of how your student loans are affecting your credit.

More on Student Loans:

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