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Student loan interest rates to rise as Congress bickers

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Minnesota college students, traditionally among some of the most debt-laden in the nation, will be among students nationwide whose loans will likely swell a little more beginning July 1.

Interest rates on federally subsidized loans are scheduled to double starting July 1 from 3.4 to 6.8 percent, unless Congress steps in to change that, and amid partisan bickering, that's not likely.

Lawmakers are pointing fingers at each other.

"We had a majority of the Senate vote for a good bill a few weeks ago that would have delayed this increase for two years, but it was blocked by our friends on the other side of the aisle," DFL Sen. Al Franken said, MPR reported.

Rep. John Kline, R-Minn., said it was "ridiculous" the parties could not come to an agreement, noting that the House has passed a student loan bill that ties rates to the market, versions of which have drawn Senate and White House support, MPR reported.

The loans at issue include Stafford loans, which are given to 7 million undergraduates from mostly low-income families, Bloomberg reports.

More broadly, Minnesota students carry the third-highest loan debts in the nation, according to one recent report. More than 9,500 higher education students in the state have defaulted in the past three years, it was reported last year.

A recent report from the Minnesota Office of Higher Education shows Minnesota college students who graduated in 2010 borrowed an average of $29,800.

Student loan debt in the nation has been on a steady rise in the last decade, climbing from about $346 billion in the fourth quarter of 2004 to $996 billion in the fourth quarter of 2012, according to a recent Federal Reserve Bank report.

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