Interest rates on federally subsidized Stafford student loans doubled overnight, soaring from 3.4 percent to 6.8 percent after Congress failed to reach a deal.
Though lawmakers potentially could still pass a bill to undo the damage, Congress’ Joint Economic Committee has estimated the increase — unless and until it is reversed — will cost the average college student an additional $2,600.
Democrats have sought to keep interest on Stafford loans low, saying poor and middle class students need the help to get a college education. Republicans have proposed linking student loans to the financial markets instead of letting Congress set federal lending rates. President Obama included a variation of that market-based approach in the budget he sent to Congress earlier this year, leaving his fellow Democrats trying to block his efforts.
“Why Senate Democrats continue to attack the president’s plan is a mystery to me, but I hope he’s able to persuade them to join our bipartisan effort to assist students,” Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, said last week
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