Updated 05/11/2012 09:26 PM
Student loan interest debate causing stress and friction
College students might soon pay higher prices for their higher educations. It's causing stress among students and friction among politicians. YNN's Elaina Athans tells us why.
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ORANGE COUNTY, N.Y. -- "That sounds terrible. That’s kind of scary," said SUNY Orange Sophomore Octavius Fraser.
College students who have received federal subsidized Stafford loans should prepare to pay double. President Barack Obama's plan to keep the interest rate on these loans as is, was blocked by some Republican Senators. That means the rate could go from 3.4 percent to 6.8 percent.
"I thought they wanted us to go to school. It seems that's the whole point of the government. Everyone wants us to go to school and that's the reason they're giving us the loans, so why would you do that to us?" asked Fraser.
One Democratic Senator says the hike with hit New York students hard, since the unemployment rate and cost of living are high.
"We don’t want to see students with tens of thousands of dollars of interest and loans being due when they get new jobs. They're going to be weighted down in debt," said U.S. Senator Kirsten Gillibrand.
Obama's plan would keep interest rates low for one year with one big price tag. The extension would cost $6 billion.
That number is the sticking point for Republicans. They want Obama to make concessions in other areas.
Presidential Hopeful Mitt Romney said last month he's all for keeping interest rates low, but he has not commented on how they should be subsidized.
Until an agreement is made, the increased interest rate will kick in July 1st.
"Threes really nothing I can do about it besides try and pay it back," said Fraser.
People who already have Stafford loans or are in the process of paying them off won't see a difference in their rate.