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Sen. Casey Warns of Looming Deadline on Federal Student Loan Interest Rate Hikes

By Kim Glovas

PHILADELPHIA (CBS) -- Much has been said about the expected doubling of student loan interest rates, but there has been little action.

But today brings a glimmer of hope for those students who are facing the prospect of a financial avalanche.

US senator Bob Casey (D-Pa.) visited Temple University today to talk about the possibility that interest on federally subsidized student loans could go from their current rate of 3.4 percent to 6.8 percent on July 1st.

Casey says higher education is imperative to improve the lives of young people.

"If you learn more now, you'll earn more later, and we've got to make sure that every student that wants to have access to this kind of loan can do it and participate in that program without watching the interest rate double on July the first," Casey tells KYW Newsradio.

About 21,000 students at Temple received direct "Stafford" loans last year, totaling $110 million.   Take those numbers and apply them to most other universities, and you'll see this is a lot of students and a lot of money.

The other side of the coin is that the number of students defaulting on student loans is up from years past. Casey says senators are still working on a bipartisan plan to address this issue, but he adds that time is running out.  He believes senators will get serious about the issue as the deadline approaches.

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