College students relying on loans took at hit on July 1, when federal subsidized loan rates doubled.
Stafford loans jumped from 3.4 percent to 6.8 percent, but Congress still has a chance to keep it at 3.4 when it reconvenes after July 4.
The estimated cost increase for students would be around $2,600, according to Congress' Joint Economic Committee, based on calculations of the average federal student loan rate of $3,385 times 6.8 percent.
Increasing loans leave many students in a bind, said UT System Chancellor Francisco G. Cigarroa, M.D., in a news release.
“It’s very disappointing that an agreement was not reached in time to avoid this huge increase in interest rates, which will no doubt create hardship for thousands of college students,” Cigarroa said.
The average UTA graduate owes about $22,000 in student loans, compared to the national average of $26,000, according to a university spokesperson. Approximately 15,000 UTA students qualify for subsidized loans, the spokesperson said.
Congress knew about the potential rate increase since November 2012, but never changed it.
For the first time, Americans owe more money in student loans than credit card debt. Student loan debt exceeds more than $1 trillion, according to www.barackobama.com, President Barack Obama’s re-election website.
More than 7 million students took out federal student loans during the 2012-2013 school year, according to the website.
Allan Saxe, political science associate professor, said the government could change the loan rate at any time.
Shakeela Hunter, Student Money Management Center director, told The Shorthorn in June that students should take out loans as a last resort paying for school.
“Always, always try to get free money up front before you have to look into taking out the student loans, because the student loans should be what completes your budget for college,” Hunter said.
Correction: The original version of this story said Allen Saxe is a political science professor. He is a political science associate professor.