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Published on Mar 14, 2012
ORONO, Maine (NEWS CENTER) -- As college graduation nears, so does the reality of student loan debt -- and the possibilty that interest rates will double in July.
Federal Legislation that capped Stafford Loans at a 3.4 percent interest rate expires on July 1, 2012.
After that, the interest rate will be 6.8 percent.
More than 8 million people currently have Stafford student loans.
The rate difference would mean a $5,000 increase in interest rate payments over a 10 year payment period, or an $11,000 increase over a 20 year payment period.
Congressman Michaud, along with 82 others, have sponsored a bill to extend the rate cap, but that bill is stalled in the house.
Michaud said the rate increase will "devastate some of the...students who want to continue their education" -- students like University of Maine senior Caleb Rosser, who wants to go to law school after he graduates this spring. "It's something I've been struggling with quite a bit actually," said Rosser about the cost of an education.
As the other bill stalls, Michaud is sponsoring his own bill, called the Student Loan Default Prevention Act.
It would give the Finance Authority of Maine permission to counsel college students on their loan portfolios.
It's help some students say, is much needed.
"Some students are not well prepared to handle that, and understand fully what those commitments are for loans," said UMaine senior Nathan Kinney.