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Students receiving the subsidized loans will have to pay an extra $1,000 a year because of the increase.
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For new students taking out yearly loans it will add at least $4,000 to the average $26,600 debt they owe to the government after graduating.
The increase was due to go ahead last Summer but was delayed by Congress because of widespread opposition from hard-up families and students paying for a college education .
Without the impetus of an election, many now fear the increase will be approved to go ahead this summer as planned, and shouldn't be allowed.
Without the impetus of an election, many now fear the increase will be approved to go ahead this summer as planned, and shouldn't be allowed.
Student groups protested today claiming the government will make a profit of 12.5 cents on every dollar of subsidized Stafford loans they make as a result.
'The argument against it is the same as it was last year: The interest rate is way too high,' Ethan Senack, U.S. PIRG’s higher education associate told NBC News.
'At a time when students and their families are already facing massive debt, this is a cost increase they simply cannot afford.'
'The argument against it is the same as it was last year: The interest rate is way too high,' Ethan Senack, U.S. PIRG’s higher education associate told NBC News.
'At a time when students and their families are already facing massive debt, this is a cost increase they simply cannot afford.'
Students using subsidized federal loans are some of the poorest in American universities, according to the New York Times.
Students receive the loans at more favorable conditions to non-subsidized Stafford loans if they can demonstrate financial need.
They don't need to pay them back until after graduation.
Borrowers make up more than a third of those using federal student aid and more than two-thirds are from families with an annual income under $50,000, according to the Times.
Many say the extra burden of increased interest rates will cripple those students once they graduate.
'Rates on educational loans are excessively high compared to those on mortgages and other consumer loans,' Tiffany Dena Loftin, president of the United States Student Association, said.
'Higher education should be more affordable than it is and we need our political leaders to respond.'
'It’s scaring everyone on campus,' 19-year old Tori Uyehara, a freshman at Southern Oregon University told NBC.
'We can’t afford the amount of interest we’re paying right now. Doubling the interest rate is just too much.'
U.S. PIRG claims that student loans across the board will generate $36 billion in revenue for the government in 2013.
Students receive the loans at more favorable conditions to non-subsidized Stafford loans if they can demonstrate financial need.
They don't need to pay them back until after graduation.
Borrowers make up more than a third of those using federal student aid and more than two-thirds are from families with an annual income under $50,000, according to the Times.
Many say the extra burden of increased interest rates will cripple those students once they graduate.
'Rates on educational loans are excessively high compared to those on mortgages and other consumer loans,' Tiffany Dena Loftin, president of the United States Student Association, said.
'Higher education should be more affordable than it is and we need our political leaders to respond.'
'It’s scaring everyone on campus,' 19-year old Tori Uyehara, a freshman at Southern Oregon University told NBC.
'We can’t afford the amount of interest we’re paying right now. Doubling the interest rate is just too much.'
U.S. PIRG claims that student loans across the board will generate $36 billion in revenue for the government in 2013.
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