Student Loan Rates Double After Congress Fails On Fix

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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