The interest rate is set to double to 6.8 percent on July 1 for students who rely on subsidized government loans, CNNMoney.com reported yesterday. Only Congress can hold the rates down, and lawmakers aren't close to agreeing on any deal to save the 7 million college students who are taking the subsidized Stafford loans this year. Senate Democrats want to extend the low rates for another two years. They are holding quiet talks with Republicans on ways to extend the existing rates in a way that doesn't add to deficits. Still, other aides suggest that allowing the interest rates to rise to 6.8 percent may be a better outcome compared to other proposals that would jack up rates even more. The rate hike does not affect existing loans and applies only to new loans that students take out after July 1.
