US federal student loan interest rates double

July 2, 2013

The interest rates on PSE Stafford federal student loans doubled from 3.4% to 6.8% this week when Congress missed the July 1 deadline to strike a new interest rate consensus. Students and PSE stakeholders in the US are now wondering if Congress will be able to come to an agreement on the interest rate before students begin signing loan documents this fall, but they will have to wait until Congress returns from a July 4break. A White House spokesperson predicted a deal could be reached before students return to campus. Times Colonist

Postscript: The US Senate failed to reverse the doubling of interest rates on subsidized student loans this week. The Senate Democrats' bill would have reduced rates on the loans to 3.4% for a year, giving lawmakers more time to craft a long-term fix. The interest rate on subsidized loans doubled on July 1 because lawmakers could not come to an agreement on a proposed plan to tie the rates to financial markets. Chronicle of Higher Education