Student loan rate doubles on Monday

Congression begins July 4 recess without reaching compromise

Student loans are about to become more expensive.
Student loans are about to become more expensive.

JACKSONVILLE, Fla. – A new law is in effect and college students and their parents won't be too happy about it. Student loan rates are doubling starting Monday.

The current 3.4 percent rate increases to  6.8 percent. Lawmakers say they're trying to find a solution.

"Its already hard enough finding a job but now having to worry about paying off these loans it's just going to be a lot for kids," said parent Theo Harnage.

Harnage has four children he hopes will all go to college. The increasing student loan rate isn't something he's happy about and neither are students.

"I've graduated but it will take me like ten years to pay off my loans, it will probably take them like 20 years now to pay off loans," said college graduate, Kyle Nelson.

The higher rates will apply to new subsidized Stafford loans, not existing loans and, which means 7 million college students who are expected to take out loans this year could be affected. 

Congress' Joint Economic Committee estimates the increase will cost the average student $2,600. In 2011, students already owed an average of $27,000 in loans.

A lot of people are worried that this increase will ultimately result in students choosing not to go to college.

"You can think of it as a mortgage. Your mortgage rate can be paid off sooner with a lower rate as opposed to a higher rate. Its just a huge difference," said Karen Ftanko who works for 121 Financial Credit Union.

Lawmakers are working to strike a deal. Senate democratic leaders want to keep the rates the same for another year which is what congress already did last year. House republicans say they're looking for a long term solution but have yet to come up with one.