(WASHINGTONPOST) — The interest rate on a key federal student loan doubled Monday, as expected, but it is unclear whether Congress will allow the increase to stand before the new school year gets under way.
Federal law has set the rate for new subsidized Stafford loans at 6.8 percent, up from 3.4 percent. The subsidy means that these loans, for undergraduates with demonstrated financial need, do not accrue interest while the students are in school. It is estimated that the rate hike would add about $1,000 in interest over the life of a loan for many borrowers.
Subsidized loans taken out before Monday are not affected. Nor are other federal loans to undergraduates, graduate students and parents.
More than 7 million students are projected to take out subsidized loans for the coming school year.