The interest rates on some federal student loans could double in less than two weeks, unless Congress strikes an unlikely deal before July 1. College educators in central Virginia are bracing for the hike, which will affect some of the neediest students.
Politics aside, virtually all lawmakers on Capitol Hill agree some sort of solution needs to be found to keep student loan interest rates from ballooning.
But lawmakers still can't agree on how to do it, and college educators in the Charlottesville area say they're concerned.
"It's certainly an additional burden. It adds to the cost of what they have to pay back for their loans," said Dr. John Donnelly, vice president for instruction and student services at Piedmont Virginia Community College.
On July 1, it could become more expensive for college students to finance their education. Without congressional action, the rates on subsidized Stafford loans will double on July 1 from 3.4 to 6.8 percent.
"The subsidized loans are targeted at our neediest students, and so we would likely see a reluctance of those students to take on the debt, and thus not come to PVCC," Donnelly said.
Donnelly helps oversee financial aid at PVCC. Though interest on subsidized loans would still not accrue until after graduation, he says higher rates could prevent some students from seeking degrees in the first place.
"It's concerning, it's concerning. We want to provide opportunities, seamless pathways for students to come to PVCC," Donnelly said.
If this sounds familiar, it should. Congress lowered the rates to their current level in 2007, intending to raise them back in 2012. Congress passed a one-year extension last year. But this year, after proposing different plans in the House and Senate, Democrats and Republicans still have yet to find a compromise.
"The politics aside, I think the issue for us here at PVCC is that it provides, or it potentially will put another burden in the path of our most needy students," Donnelly said.
Even if rates do increase there are other options to help students finance their education including private grants and scholarships.
PVCC is hosting a financial aid workshop this Saturday, June 22 from 10 a.m. to 2 p.m. to help incoming and returning students learn more about those options.
In response to the impending rate increase, Senator Tim Kaine (D) Virginia released the following statement: "Making higher education affordable for students is critical to fostering a talented workforce and growing our economy. In Virginia alone, more than 179,000 students have student loans and their debts will rise if Congress doesn't act before July 1. I am proud to co-sponsor the Student Loan Affordability Act of 2013 to keep student loan interest rates low and prevent students from facing an annual rate hike of nearly $1000."
NBC29 hasn't yet heard back from Representative Robert Hurt (R) 5th District or Representative Bob Goodlatte (R) 6th District.