Student Loan Rates to Double — Will You Pay $2,600 More?

The Senate failed to lower certain student loan rates Wednesday, meaning some students returning to campus in the fall could end up paying double the interest rate they used to.

Senate Democrats’ proposal would have left the rates on government-subsidized Stafford student loans at 3.4 percent for another year, giving legislators time to come up with a long-term fix for the system. The rate has remained at 3.4 percent for the last two years.

But supporters failed to get the necessary 60 votes, which means interest rates will stay at 6.8 percent after doubling on July 1, when Congress failed to come to a decision on how to keep them steady for the next school year.

Sen. Tim Kaine (D-Va.) released a statement shortly after the decision, expressing his displeasure with his colleagues.

“I am extremely disappointed the proposal to keep subsidized Stafford student loan rates at 3.4% was stopped by a filibuster,” he said in the statement. “I have long supported measures, including the Student Loan Affordability Act, that would have prevented the doubling of these rates.”

According to Kaine, more than 179,000 students in the Commonwealth will be affected by the increasing rates, and their doubling could severely affect their finances.

“Saddling students with high levels of debt hurts students, communities, and our economy,” he said.

The increased rates won’t affect students right away, since new loan documents are usually signed when students return to school in the fall.

But come the fall, it could mean a bill higher by about $2,600 over the life of an average student's loan, according to Congress’ Joint Economic Committee.

Tell us: Are your interest rates going to increase? Are you worried? Let us know in the comments.