Interest rates on student loans set to double July 1

On July 1, interest rates on government-subsidized student loans are set to double from their current rate of 3.4 to 6.8 percent.

Unless Congress acts to stop this increase, students will pay an additional $1,000 for each year they take out loans to pay for their education. Democratic Congressman Dave Loebsack has been pushing to stop this increase, but financial aid advisors at Indian Hills say even if the interest rates do go up, the FAFSA is still the best loan students can receive.

"The Federal Student Loans are still going to be the most cost-effective way to borrow if you need to borrow to pay for your college education," Chris Bowser, IHCC Director of Financial Assistance, said. "What I would always recommend is when you get your reward letter from the college that you wish to attend, you should definitely sit down with that award letter and see what they're offering, but then really find out what you need to take."

The interest rate hike was going to take effect last year, and Congress agreed to delay the increase for one year. The rate hike would effect more than seven million students.