Student loans: Interest rates on new subsidized Stafford loans are set to go from 3.4 percent to 6.8 percent on Monday. Some are calling for an extension of the current student loan interest rates for another year.
(AP Photo/Susan Walsh)
Student loan rates will double Monday — at least for a while — after a compromise to keep student loan interest rates low proved unwinnable before the July 1 deadline, senators said Thursday.
Sen. Tom Harkin, the chairman of the Senate education panel, said none of the proposals being circulating among lawmakers could win passage, and he urged lawmakers to extend the current rates for another year when they return from the July 4 recess. Harkin said his colleagues could retroactively restore the current rates after the holiday.
"Let's put this off for a year," Harkin, D-Iowa, told reporters.
Interest rates on new subsidized Stafford loans are set to go from 3.4 percent to 6.8 percent on Monday unless lawmakers take action. Congress' Joint Economic Committee estimates the increase will cost the average student $2,600.
"Neither party wants to see rates rise next week," said Sen. Richard Burr, R-N.C.
But a one-year rate extension isn't an acceptable option, either, he said.
"Last year we kicked the can down the road and passed a one-year extension for only a small group of students. ... Why would we make the same mistake again and just kick the can down the road another year?" said Burr, who was among a group of senators who worked on a competing proposal with Sen. Joe Manchin, D-W.Va.