Lawmakers have until June 30 to decide whether to continue or discontinue a provision from the College Cost Reduction and Access Act, passed in 2007, which lowered student loan interest rates from 6.8 percent to 3.4 percent. If Congress doesn't extend the provision, student loan interest rates will go up to 6.8 percent, according to Fox Business.
Even with the current rate of 3.4 percent, student loan debt surpassed $1 trillion last week, according to the article. That's approximately 16 percent higher than estimates made by the Federal Reserve Bank of New York earlier this year.
With the nation's deficit continually rising, the federal government is being forced to cut spending in different areas, Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, told Fox Business. But if the government doesn't cut spending in one particular area, then it has to cut spending elsewhere.
Students who borrow the maximum $23,000 over four years in subsidized student loans will be required to pay $5,200 more in interest over 10 years, and $11,300 more over a 20-year pay period, if the rate jumps to 6.8 percent, according to consumer group U.S. PIRG.