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Unless Congress acts, student loan interest rates will double

Each spring millions of young Americans graduate from colleges, universities and technical programs all over the United States. Their young lives offer promise and hope for the future of Massachusetts. However, in today's world many are held back by the burden of crippling student loan debt.

Over the last few decades the cost of higher education has gone up so significantly that people have been forced to borrow more and more money in order to go to college. In fact, since 2004 the amount of student loan debt in America has tripled. Currently, Americans owe nearly $1 trillion in student loan debt.

Often low paid graduates are coming out of school with so much debt that they cannot afford their everyday expenses and are facing serious financial challenges. As if this burden is not enough, it is soon to become even more difficult to pay student loans. As of July 1, 2013 the interest rate of subsided federal loans is set to double.

Currently, the rate is 3.4 percent. In July, the rate will jump up to 6.8 percent -- unless Congress acts. While plans have been proposed by both members of the House and Senate, no consensus has been made. Massachusetts Senator Elizabeth Warren has proposed a plan to allow students to have the same low interest rate as large banks. However, the House has passed a separate bill which would tie student loan interest rates to the market rate. This plan would allow the interest rate to fluctuate up to 8.5 percent.

Unless Congress can work out a deal in the next couple of weeks, people across the United States will be seeing higher payments. In many cases, people may not be able to afford these changes and may be looking for debt relief. Thankfully for consumers, debt relief options are available that can eliminate debt and help people move forward with a fresh start.

Source: Mother Jones, "Student Loan Debt Is a Beast. Here Are Elizabeth Warren's, President Obama's, and the GOP's Plans to Fix It.," Erika Eichelberger, Maggie Severns and Brett Brownell, June 3, 2013