Democrats , President Obama and Republicans were unable to come up with a plan to stop government student loan interest rates from doubling from 3.4 to 6.8 percent on July 1st.

In 2007, Congress approved a mesasure to temporarily lower the interest rate on Stafford loans from 6.8 to 3.4 percent. Once this legislation expired in 2012, the rate would bounce back to 6.8 percent unless a compromise was met.

According to PBS, students are already facing record- high tuition costs. An increasing 7 million students will be affected by today's interest rate hike. Last summer, Congress postponed the increases for a year but during their last meeting before their July 4th recess they could not agree upon a long term solution, even though the Republican plan and President Obama's plan are very similar.

Smarter Solution for Students Act
This Republican plan bases the Stafford loan rates (subsidized and unsubsidized) on the 10-year Treasury interest plus another 2.5 percent , capped at 8.5 percent. Graduate and Parent PLUS loans would also be based on the 10-year Treasury interest rate, plus 4.5 percent, capped at 10.5 percent. They estimate it would save the government $995 million over five years, and $3.7 billion over the next ten .

Democrats in the Senate oppose this bill, spokesman Harry Reid, D-Nev, said, “Republicans continue to insist that we reduce the deficit on the backs of students and middle-class families, instead of closing tax loopholes for the wealthiest Americans and big corporations."

President Obama threatened to veto the bill. His plan is not so different to Smarter Solution Act. It would also tie the interest rates to the 10 year Treasury rate, but it does not offer a cap.

Matt Lehrich, White House spokesman says the Senate “will take action in the next few weeks to fix this problem.” On July 10 they will vote on a proposal that would extend the current 3.4 percent interest rate another year.

Current students are understandably concerned, , FinAid says the student debt in this country has surpasssed 1.1 trillion dollars. . One business major at the University of Maryland says, "They're sort of putting the burden on a younger generation, and once we are old enough to vote and once we're part of the economy and we ... default on our loans, it's going to be a big issue, and they're going to regret it.”