Vestal, NY (WBNG Binghamton) Interest rates for some student loans have doubled in the past week. Because Congress failed to hash out a solution, the interest rate for federal subsidized Stafford loans now stands at 6.8 percent.
School might be on summer break, but the financial aid office at Binghamton University is full of students trying to determine next steps after the rates on a popular loan doubled from 3.4 percent to 6.8 percent.
"That's gonna hit the pockets of many families here, which is unfortunate," said Dennis Chavez, director of financial aid at Binghamton University
For these loans, interest is charged only after students leave school. Doubling the interest rates means more stress once they start their careers.
"I will have to take out at least three or four more subsidized loans in the future to actually attend school," said BU sophomore, Ryan McGinn.
The reality is no longer if students will leave school with debt, but how much.
"For many families it's not a question of do I borrow or not borrow," Chavez said, "It's the question that if I don't borrow, I don't have the funds to cover my education or expenses."
For example, if a student takes out a $5,000 government-backed loan, with the interest rate at 3.4 percent, that student will have to pay $887 over the next 10 years. But an interest rate of 6.8 percent would mean the student would pay $1,905 during the same period.
"For me it's a very daunting challenge, and I don't have back up funds," explained McGinn, "I mean I'm just going to have to deal with it and I imagine some people, wanting to deal with it is just too much."
The potential burden on students has caught the attention of one of New York's senators.
"That is outrageous," said U.S. Sen. Charles Schumer (D-NY. "One of the hopes for America is to have kids who are qualified go to college, go to college."
Although Congress didn't agree before taking their 4th of July break, Schumer said there's still hope.
"We are trying to come to an agreement between both houses," Schumer said, "To put at least a one-year freeze on the 3.4 (percent) status until we can work out an agreement for the longer term."
It's an agreement that could potentially save thousands of students at Binghamton University from future student loan debt.