CONWAY, SC (WBTW ) — Coastal Carolina University students who took out loans for the 2022-23 academic year will pay higher interest rates.

Congress raised the interest rate to 4.99% — a 1.26 percentage point increase since 2021-2022.

This is the highest increase in more than seven years.

Tuition for out-of-state students rose 4%, while in-state tuition did not budge. However, the rate for room and meal plans rose by three and 8.6%, depending on the plan selected.

According to Forbes, 92% of American student debt is in federal loans and the remaining 8% is private loans.

Federal loans have fixed rates. Once the borrower takes out a loan in a specific year, that interest rate will not change. However, private loan rates fluctuate throughout the year.

Joe Taylor, co-founder of Oak Street Advisors, said there are alternative options for borrowers when the interest rates decline.

“Student loans that they could refinance privately at a lower rate,” Taylor said. “Lower their payments, pay it off sooner, and move on with their life.”

The hike is to tame inflation as the cost of living has spiked, Taylor said.