Interest rates to increase on student loans

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(CNN) - July first might as well be doomsday for millions of Americans paying off their college student loans.

Interest rates could double.

Zain Asher talks with some students about what the higher rates would mean for them and their finances.

Rachel Boehr, Student:  "I'm almost $60,000 in debt, which will affect my ability to get a mortgage, my ability to have children and put them through a good education; it'll will affect which kind of job I choose."

Columbia student Rachel Boehr started out studying drama but skyrocketing tuition costs forced her to drop out, now at age 30, she's only just finished her undergraduate degree.

Ryan Morgan, Student:  "We're asking too much of our college students and we're narrowing and narrowing the field of who can be a college student in the country."

American college grads owe more than $1 trillion dollars.

Tuition costs continue to soar; rising interest rates could soon become the next headache facing new grads.

Interest rates for need-based or Stafford loans, is currently fixed at 3.4%.

Unless congress intervenes by July 1, that rate is scheduled to double.

Kalman Chany, Author, "Paying for College Without Going Broke":  "I definitely think that doubling the rate to 6.8% would definitely increase default rates because again the students who are receiving the subsidized loans these loans are from the lowest income brackets."

While some lawmakers want to keep rates at the lower 3.4% for at least the next two years, others say student loan interest rates should be allowed to fluctuate according to market forces.

Sarah Schutz, Student:  "I think there's gonna be some kind of compromise. Some kind of adjustment. I don't know if they're gonna go to a variable rate loan. My guess is they may just kick the can down the road and say we'll just do this for one year and we'll revisit it another year later."

If rates do increase, the bad news for students could become a revenue booster for government.

The higher interest rate would generate $36 billion in revenue this year at a time when congress is scrambling for cash.

But higher rates could cost students as much as $5000 more in loan repayment charges over a 10-year period.

Rachel Boehr, Student:  "The president and Mrs. Obama just finished paying off their student loans. And I think thatthe fact that they were 40 years old and they still were paying off student loan debts is really scary. We could even be 50, 60 years old without having paid off our student loans."

"Politicians have to look beyond their own self-interest because college students like myself and my peers are counting on them."