Bank of America Corp (BAC), U.S. Bancorp (USB) – Stalled Student Loan Bill: Here’s How It Affects You

What you should do next
Regardless of what happens with the student loan bill impasse, the key for students and parents looking to take out student loans is to recognize that they have minimal leverage in affecting the congressional debate.

Even then, the debate doesn’t affect you if you don’t qualify for subsidized loans or if you’ve already graduated. All of the proposals affect only future loans, and the way your existing rates are calculated won’t change.

For all others, the first thing to do is to figure out what type of loans you have or are eligible for and recognize that rates on Stafford loans have historically been substantially lower than what’s available elsewhere — and even if those rates rise significantly, you’re not likely to find better deals.

Next, focus on reducing the amount you need to borrow in student loans in the first place.

Early college savings, financially savvy decisions about which college a student chooses, and looking into lower-cost alternatives on housing options and other necessary college expenses can reduce your need for student loans (and the whims of lawmakers). In particular, with tax-free accounts like 529 plans and Coverdell Education Savings accounts, parents can work to help their children avoid the difficulty of entering adulthood with a big debt burden on their shoulders before they even get their first job.

Whatever the government does with rates, the student loan bill impasse is a good reminder that taking control of your own financial destiny is the best way to handle uncertainty.

Unfortunately, those who rely on loans will end up having to accept whatever decision the government makes, with few if any alternatives to what could prove to be a tougher repayment burden for years to come.

The article Stalled Student Loan Bill: Here’s How It Affects You originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.