WASHINGTON (KTLA) – Student loan rates were set to double to 6.8 percent on July 1, if Congress fails to take action.
President Obama and members of Congress agreed that something should be done, but they could not agree on what.
The Republican-controlled House passed a bill last week that would have stopped rates from doubling now, but allow them to rise later.
However, President Obama vowed to veto the bill.
The President called on Congress to follow his approach and extend the current 3.4 percent federally subsidized student loan rate.
While congressional Republicans have supported bills that would tie students’ borrowing costs to market fluctuations in interest rates, Democrats in the House backed short-term proposals that would keep rates at present levels set by the government.
Proposals from both sides of the aisle have so far failed to make it through the Senate.
If Congress failed to reach an accord in the next two weeks, rates were set to automatically double.
The rate hike would only affect undergraduates who have subsidized loans, in which the federal government absorbs some of the cost.
Seven million undergraduate students took out subsidized loans for the 2013-2014 school year.