United States Senate Republicans blocked debate on a bill Tuesday that would have prevented interest rates on college loans from doubling, which could leave students with an increased interest rate on federal loans starting July 1.

The bill would have extended the 3.4 percent interest rate on Direct Stafford Student Loans from July 1, 2012 to July 1, 2013 and stopped interest rates from increasing to 6.8 percent.

The $6 billion necessary to pay for the bill would have come from increasing Medicare and Medicaid taxes for high-income individuals. Senate Republicans said they want to lower interest rates as well, but would rather fund their version of the bill by eliminating provisions in Obama’s health care overhaul.

In a statement, U.S. Sen. Ron Johnson, R-Wis., said young people are suffering from the economy and unable to find jobs.
He said the proposed bill only used students as “political pawns.” 

U.S. Sen. Herb Kohl, D-Wis., said in a statement students rely on Congress to keep their loan rates from rising, and this was not the time to increase debt burden on recent college graduates as they struggle to find their first jobs.

Approximately 10,000 University of Wisconsin undergraduate students will experience loan increases if a compromise is not reached, with the average student expected to owe $1,000 more over the course of their loan repayment, Susan Fischer, UW director of financial aid, said.

In 2010-2011, federal funding made up 60 percent of sources utilized by undergrads seeking financial aid. Of the nearly 30,000 UW students receiving financial aid, more than 13,125 received federally subsidized Stafford Loans in the 2010-2011 school year, at a total of approximately $70.5 million, according to financial aid data released by UW Madison.

However, almost half of all undergrads graduated with debt in 2011, a percentage that has steadily increased since 2001, with the average amount of debt for a UW student at $24,493, according to the data. 

Fischer said she expected student loan interest rates would increase.

“It’s been set to sunset for a couple years, so it’s not a surprise,” Fischer said.

She said the issue of loan interest rates comes down to two parties who claim they are committed to lowering student debt, but are not able to agree on what needs to be done. She said the parties are in a “tug-of-war” over the issue.

Fischer also said she does not foresee changes to loan interest rates impacting other UW financial aid programs.

UW professor and former Chancellor John Wiley said he also thought students seeking loans are now caught up in a political battle.

“The Republicans want to keep the interest rate where it is and don’t want the blame. They would like to take the fund for women’s health care, which they say is a slush fund, but Democrats don’t want to do that,” Wiley said.

He also said tuition in Wisconsin is already becoming increasingly unaffordable for average and below-average income families, and students are forced to amass significant amounts of debt.

Although Wiley predicted interest rates would stay at 3.4 percent, he was confident Congress will be dealing with the issue of funding for a while.

“I don’t know how it will be resolved,” Wiley said.

The Associated Press contributed to this story.