Seven million college students will be socked with more loan debt on Monday. That's when interest rates on government backed student loans are set to double. YNN's Washington, D.C. bureau reporter Geoff Bennett has the story.
WASHINGTON, D.C. -- Call it another manufactured crisis in the nation’s Capitol. Republicans, Democrats and the Obama administration could not agree on a plan to keep the interest rate on federal Stafford loans from doubling. That means rates will jump from 3.4 percent to 6.8 percent.
Democrats say they want to keep interest rates on Stafford loans low to help middle class families. Republicans, in cost cutting mode, want to link rates to the financial markets and allow them to float up to a cap of 8.5 percent.
But one thing a lot of lawmakers agree on: Affordable student loans shouldn’t be a political football.
“It is so embarrassing. But sooner or later, people are going to wake up. We just can’t afford to do this to our students and we can’t afford to do this to our economy,” said New York Representative Charlie Rangel.
On Thursday, in a last ditch effort, two different groups of senators introduced plans that would prevent an increase on those student loan rates.
“Our young people cannot afford even more debt. Do you realize today that Americans have more student loan debt than credit card debt? We cannot put our young people even further behind,” said North Carolina Senator Kay Hagan.
But the Senate adjourned Thursday evening for its July 4th recess without striking a deal. An agreement is still possible after the break and it would likely include retroactive legislation stopping the July 1st increase.