ALBANY, Ga. -- With tuition coasts soaring at college campuses all across the nation, strapped students received another nasty surprise on Monday when Subsidized Federal Stafford Loan interest rates officially doubled from 3.4 to 6.8 percent, jumping higher than most loans available from private lenders.
Though the increase in rates originally scheduled for last summer was staved off by Congress before the original deadline, efforts to do so this year were unsuccessful.
Last month, Rep. Sanford Bishop, D-Albany, attempted to force an up-or-down vote by signing a discharge petition to bring up a bill he cosponsored: H.R. 1595: the Student Loan Relief Act of 2013.
The bill would have frozen the interest rate at 3.4 percent for the next two years, giving Congress time to enact comprehensive student loan reform as part of a reauthorization of the Higher Education Act.
However, the effort to keep the rate from doubling collapsed last week when the House and Senate failed to replace the existing fixed interest rates with market-based rates.
"As many of the new jobs of the next decade will require further education, it is an economic necessity that higher education remains an accessible opportunity for every student," Bishop said. "Already, too many students across the nation are burdened with rising loan debt, one of the largest hurdles of the education process."
Republicans and Democrats pointed fingers at each other for a rate hike that will add to student loan debt, which is already larger than the nation's credit card debt
Albany State University Financial Aid Director Thomas Harris said ASU was ready for the hike.
"This is not a surprise to us; we knew it (the rising rate) was going to occur," Harris said. "The rate change will affect borrowers who are in repayment plans now and will be in the future. The new numbers are already plugged into our system.
"We will do more default counseling with our students and prepare new payment rate cards. This isn't the first time we have dealt with rate hikes."
Subsidized Staffords Loans are often bundled with other loans and go to the neediest students. Those loans comprise nearly 25 percent of all direct federal borrowing.
Lawmakers have vowed to address the issue when Congress reconvenes after the Fourth of July holiday.