Update: This story has been updated to include information about the Senate being unable to reach a compromise Wednesday evening.
COLUMBIA — Interest rates on subsidized Stafford loans are set to double Monday, increasing borrowing costs for more than 40 percent of MU undergraduates.
Senators were unable to reach a compromise Wednesday evening, but did not rule out attempting to extend the 3.4 percent rate after returning from the July 4 recess, according to an AP story.
Nick Droege, president of the Missouri Students Association, joined more than 100 campus leaders from across the country to send a letter urging lawmakers to take action on the rates.
"We signed on with the national effort, and we kind of took it into our own hands to make local efforts," Droege said. "Right now, we’re focusing on contacting our local representatives by calling and tweeting and urging them to take action."
Subsidized Stafford loans are available to undergraduate students with financial need. The U.S. Department of Education pays the loans’ 3.4 percent interest rate until six months after a student leaves school.
The rate is set to jump to 6.8 percent next week.
Unsubsidized Stafford loans, available to all undergraduate and graduate students regardless of financial need, already have an interest rate of 6.8 percent, which the student begins paying immediately after taking out the loan.
During the 2011-2012 academic year, 10,491 undergraduates at MU took out $42.7 million in subsidized Stafford loans, according to the Missouri Department of Higher Education's DHE-14 form.
Justin Chase Brown, associate director of the MU Office of Student Financial Aid, said few students have expressed concern about the increase.
"We haven’t heard much feedback" from students, Brown said. "There’s a lot of misinformation."
Brown said some sources have suggested, incorrectly, that a rate hike would cost students $1,000 more a year. Rather, he said, students who make minimum payments on their loans for 10 years would expect to pay about $2,600 more over the life of each loan.
"When they talk about the interest rate doubling, that puts a more severe perspective on it," Brown said. "It’s not like their loan would double, but it would impact students and how much they end up paying in the long run."
According to the Department of Education, MU students take out a median of $19,403 in federal loans to finance their education. The national average is more than $26,000.
Droege, who receives financial aid including a subsidized Stafford loan, urged all students and Columbia residents to take action.
"The biggest thing that would be really helpful, whether it’s students who are affected or students who aren’t, or even people who aren’t students at all, would be to contact local representatives," Droege said.
Given the time constraint, he suggested contacting U.S. Rep. Vicky Hartzler, R-Mo., and U.S. Sens. Claire McCaskill, D-Mo. and Roy Blunt, R-Mo.
"That’s kind of all we can do right now, being in the time crunch we are now," Droege said.
Supervising editor is Elizabeth Brixey.