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Student loan interest rates to double Monday

Student loan rates are set to double Monday, July 1, 2013 after Congress failed to pass legislation to prevent an automatic rate hike.

June 30, 2013 12:00:00 AM PDT
Student loan rates are set to double Monday after Congress failed to reach a deal to keep the current interest rates in place before the July 1 deadline.

The chairman of the Education Committee and other Democrats said Thursday that the Senator would vote on July 10 on a one-year extension of the current interest rates.

Under this plan, Congress left for the week-long July 4 recess without preventing the automatic rate hike set to go into effect Monday.

Without congressional action, interest rates on new subsidized Stafford loans are set to go up from 3.4 percent to 6.9 percent.

A congressional report estimates the high interest rates would cost the average student approximately $2,600.

Lawmakers promised to return to Washington and retroactively restore the rates with a short-term fix and then a longer-range measure.

ABC News and The Associated Press contributed to this report.