Student loan interest rates set to double on July 1

Students already struggling to afford the cost of college are about to get hit with another financial whammy – interest rates on many student loans are set to double on July 1.

Rates on government subsidized Stafford loans will rise to 6.8 percent from the current 3.4 percent unless Congress steps in and halts the change.

The average student graduates with nearly $27,000 in loan debt and the consumer advocacy group U.S. PIRG estimates that the rate hike would tack an extra $1,000 onto each loan.

"It’s scaring everyone on campus," 19-year old Tori Uyehara, a freshman at Southern Oregon University, told NBC's Today.

"We can’t afford the amount of interest we’re paying right now. Doubling the interest rate is just too much."

Student advocates upset with the rate increase sent an issue brief to the White House claiming that the government shouldn't be profiting from student loans.

"Higher education loans are meant to subsidize the cost of higher education, not profit from them, especially at a time when students are facing record debt,” Ethan Senack, the higher education advocate at U.S. PIRG told the New York Times.

"The revenue from student loans should be used to keep education affordable, and should never be used to pay down the deficit or for other federal programs," Senack said.

The group is citing a February report from the Congressional Budget Office that said the federal government is making a profit of 36 cents for every dollar it lends out in student loans.

Congress is expected to take up the issue but there are no guarantees it will agree to halt the rate increase.

The Senate budget resolution, authored by Sen. Patty Murray (D-Wash.) would keep the interest at 3.4 percent while many Republicans favor a variable rate.

The New York Times reports that Democratic Rep. Joe Courtney of Connecticut plans to introduce legislation that would extend the 3.4 rate for two years.