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Student Loan Interest Rates To Double

Last updated on Saturday, June 29, 2013

(UNDATED) - Interest rates on federal student loans will double Monday — at least temporarily.

Congress has passed a series of one-year extensions to a law which cut the loan rate to 3.4-percent. This year, President Obama and House Republicans proposed different forms of a bill linking the rate to Treasury rates. Republicans' bill passed the GOP-controlled House, but the Democratic Senate majority rejected a similar proposal, while Republicans blocked a Democratic bid for another one-year extension. That means the rate will revert Monday to 6.8-percent.

Fifth District Representative Susan Brooks (R) blasts the Senate impasse as "embarrassing and disgraceful." She says the House bill would take politics out of the equation by tying student loans to market rates. The former Ivy Tech vice president says students should be able to benefit from the same low interest rates as homeowners and car buyers.

If rates rise again, Brooks says, the House bill would protect students by capping the rate at eight-and-a-half-percent. Obama has criticized the GOP formula, arguing rates could end up even higher than the level they'll hit Monday.

A spokeswoman for Indiana Senator Joe Donnelly (D) says the senator is "disappointed" the House and Senate haven't been able to agree.

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