Some of you may not know this, but on July 1^st, the student loan interest rates went up. Being college students, we really should be aware of the different ways college is getting more expensive. So, here’s what you need to know happened to student loan interest rates and what you can do to soften the blow to your student debt increase.

According to Politico, the student loan interest rates went up July 1^st because they are tied to 10-year Treasury notes.

For new undergraduate student loans: increase from 3.76% to 4.45%

For direct loans for graduate students: increase from 5.31% to 6%

For rates on federal PLUS loans: increase from 6.31% to 7%

These new interest rates are fixed for the lifetime of the loan. These changes DO NOT affect existing borrowers who have already taken out their loans. That means that if your loan is disbursed after July 1^st of this year, then the increased interest rates apply. If the loan was disbursed prior to July 1^st, the old interest rates apply.

Now, even though the increase in student loan interest rates has increased, there is a way to minimize the impact.

A study featured in U.S. News revealed that the new student loan interest rates when spelled out, cost the borrower relatively little and there is also a way to lessen the interest rate even from the prior interest rate.

For an example, let's take a senior undergrad student with a Stafford loan of $5,500 in subsidized funds. Under last years rate, this $5,500 loan would cost $6,607 to repay under the traditional 10-year, 120 payment-plan. The newly raised interest rates would make that amount go up to $6,824 – a difference of about $200 over 10 years. That’s about $1.80 more each month under the 120-month repayment.

Let's take another example of that same amount of $5,500 but with an unsubsidized loan (that means your loan starts accruing interest as soon as you get the money). That $5,500 unsubsidized Stafford loan would accrue about $200 of interest in 1 year at the prior 3.76% interest rate. The new interest rate of 4.45% raises that by about $40 to $245, which combined, shifts the amount to about $2.18 more per month.

Even though when these rates are spelled out it may not seem like a lot, it’s still hard for us to know that we’ll owe more than before. So here’s how to manage:

The best option with these higher interest rates for students with unsubsidized loans is to start paying that interest while you are still in school. The study revealed that the unsubsidized loan of $5,500 accrues about $245 in interest a year. That means saving about $20 a month while you’re still in school. That’s like 4-5 cups of coffee you make at home instead of buying out.

If you have a subsidized loan and do the same thing, that is, trim your balance by $245 to $5,225 then your repay $6,483 over 10 years. Not only is that less than the $6,824 you would have paid if you didn’t make these payments, it's also $100 less than you’d pay with the old interest rates.

To all my fellow college students raking in those loans: I hope this helps!