Consumer Federation of California

College students’ interest rates are at the mercy of Congress.

The interest rates on subsidized Stafford loans doubled from 3.4 percent Monday and could stay doubled unless Congress fulfills its pledge to restore lower rates when it returns from the Fourth of July holiday.

Lawmakers from both parties, as well as the White House, vowed to lower that rate before students started signing loan documents this fall. But the rate now stands at 6.8 percent — higher than most loans available from private lenders.

“In the grand scheme of all the loans that I already have, I suppose it’s not out of control,” said Angie Platt, a 20-year-old University of Iowa student who expects to graduate with at least $60,000 in debt.

“It’s just another thing to add on. It doesn’t help me, that’s for sure,” the Lakeville, Minn., native added.

Efforts to keep interest rates from doubling on new subsidized Stafford loans fell apart last week amid partisan wrangling in the Senate. Democratic senators and the White House both predicted a deal would be reached in Congress to bring the rates down again before students return to campus.

But if an agreement remains elusive, students could find themselves saddled with higher interest rates this year than last. Congress’ Joint Economic Committee estimated the cost passed to students would be about $2,600.

“It’s kind of surprising — that’s a big jump,” said Rebecca Ehlers, an Iowa State University senior majoring in math.

A $1,000 subsidized Stafford loan is part of her financial aid package and she said she’s reconsidering how she pays for school.

“I may work more or ask my parents for money rather than going through all that,” said Ehlers, 21.

She — like millions of others who use federal student loans to pay for their education — has some time before she has to make that decision. But not much.

“The only silver lining is that relatively few borrowers take out student loans in July and early August,” said Terry Hartle, a top official with colleges’ lobbying operation at the American Council on Education. “You really can’t take out student loans more than 10 days before the term starts.”

But that is little consolation for students looking at unexpected costs waiting for them on graduation day if Congress doesn’t take action before it breaks again for the month of August.

Students only borrow money for one school year at a time. Subsidized Stafford loans taken before Monday are not affected by the rate hike, nor are federal PLUS, Perkins or unsubsidized Stafford loans slated for the coming year.

“We’re telling members to advise students that interest rates are going up,” said Justin Draeger, president of the National Association of Student Financial Aid Administrators.

Subsidized Stafford loans go to needier students and often are coupled with other types of lending. Those loans make up roughly one quarter of all direct federal borrowing.

Both political parties tried to blame the other for the hike and student groups complained the increase in interest rates would add to student loan debt that already surpasses credit card debt in this country.

Lawmakers knew for a full year the July 1 deadline was coming but were unable to strike a deal to dodge that increase. During last year’s presidential race, both parties pledged to extend the 3.4 percent interest rates for another year to avoid angering young voters.

But the looming hike lacked sufficient urgency this year and Congress last week left town for the holiday without an agreement. Instead, the Democratic-led Senate pledged to revisit the issue as soon as July 10 and retroactively restore the rates for another year — into 2014, when a third of Senate seats and all House seats are up for election.

At the White House, a spokesman predicted a deal could be reached before students return to campus.

“We are confident they will get there and that the solution will include retroactive protection for students who borrow after July 1 so that their student loan rates don’t double,” Matt Lehrich said.

Even when lawmakers return, there’s no guarantee there will be the votes to restore the lower rates. Efforts last week to reach a bipartisan agreement fizzled and there have been few examples of meaningful compromise in Congress.