ALBANY. NY – Student loan rates are set to double on Monday, July 1st after lawmakers in the Senate could not come to a compromise before the deadline.
“The deal on the table is to double the student loan interest rate on the subsidized Stafford loans,” Dean Skarlis of the College Advisor of New York said.
He said it's one of the most popular federal funding options for college students.
Alli Lu explained, “My family doesn't have enough money to pay my tuition, so I had to take loans.”
Loans will now go from 3.4 percent to 6.8 percent.
“If they double I'm going to have to pay more, and it's going to be harder to pay my loans,” Cody Ciaschi, a sophomore at Siena College, said.
If the higher rate sticks, it could mean a $40 increase in payments every month. For a student taking on a new loan, finance experts say it's a total increase of about $2,600.
“My guess is they won't let it go all the way up to 6.8 percent,” Skarlis added. “They may go back and do something retroactively after the deadline passes.”
That's what some students hope happens.
“Especially in today's economy, where jobs are hard to get and they have to pay back more on these loans, it's going to be hard for people to come to college,” Ciaschi said.
Congress isn't planning to hold a vote before Monday, but a solution could come as early as July 10th.