As inflation rates rise, the Federal Reserve increased the federal interest rate

Wednesday by 0.75 percentage points, the largest hike in 28 years.

"We at the Fed understand the hardship that high inflation is creating," Fed chairman Jerome Powell said

At a press conference. "We intend to bring inflation back down expeditiously," Powell said, as reported by CNBC.

The president of the United States, Joe Biden, signed an executive order in April extending the moratorium on student loan payments 

To August 31, 2022. Meanwhile, the interest rates on most federal student loans and subsidized loans have been

Suspended since March 2020 due to the COVID-19 pandemic. Fed fund rate increases affect

the economy significantly, just as inflation does. How does the Federal Reserve's hike in interest rates affect people with federal student loans?

There isn't much to say in the short answer. Only a few students will see an increase in interest rates due to the Fed rate increase.

Due to a fix rate system established on July 1, 2006, existing federal student loans will not be affected.

Only if you received a variable-interest student loan before July 1, 2006, are you exempt from the above.

As a result, a loan still owed from that point on would have an increased interest rate.

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