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Originally published Saturday, June 29, 2013 at 8:00 PM

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Student-loan interest rates to double next week

The Education Department can administratively handle a retroactive interest-rate adjustment, once Congress acts.

Bloomberg News

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The rate that college undergraduates from lower-income families pay for student loans will double Monday. The U.S. Senate has left for a one-week break without an agreement on what to do about the automatic hike.

The interest rate for new subsidized Stafford loans will rise to 6.8 percent from 3.4 percent. More than 7 million students borrow through that program.

With one group of senators pushing for a floating interest rate and another group seeking a one-year freeze, action was postponed.

Senate leaders have agreed to schedule a July 10 procedural vote on S. 1238, a bill that would keep current rates in place until 2014, said Sen. Jack Reed, D-R.I.

The Education Department can administratively handle a retroactive interest-rate adjustment, he said.

With subsidized Stafford loans, the government pays the interest during school.

Unsubsidized Stafford loans have a 6.8 percent.

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