Student Loan Rates Double

WASHINGTON (July 1, 2013)--Interest rates Monday on some new federally-backed loans for college students were double what they were last week.

Subsidized Stafford loan interest rates rose to 6.8 percent on Monday because Congress didn't strike a deal to keep them low, which translates to an extra $2,600 per student in costs.

That affects roughly a quarter of all federal borrowers.

The effects aren't immediate, though because most students sign their loan documents when they return to campus in the fall.

Lawmakers say they can return the interest rates to 3.4 percent when they return after the July 4 holiday.

The Republican-led House passed a bill before leaving town that linked student loan interest rates to the financial markets, but the Democratic-led Senate was unable to overcome a procedural hurdle.

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