Student debt in the United States has already surpassed the country's auto loans and consumer credit card debt. A student loan bubble looms on America's horizon, and promises dark times should it ever burst.
And earlier this month, the student loan problem worsened.
Federally subsidized Stafford loan interest rates doubled from 3.4% to 6.8% after Congress missed the July 1st 2013 deadline, and instead recessed for the Independence Day holiday.
The failure sparked frustration amongst student advocates nationwide.
However, Congress is able to retroactively "fix" the damage done by the soaring rate increase - that is, if Democrats and Republicans can come to an agreement on the matter.
So far, no dice: an emerging bipartisan Senate deal hit a stumbling block last week.
Even though the House was able to pass its own plan in May, the Senate is still at an impasse.
Democratic senators are avoiding the prospect of trying to "balance the budget on the backs of students."
On the other hand, Republican senators want a plan that doesn't risk adding huge sums to the deficit.
Here's what we've got so far:
The tentative deal ties Stafford loan interest rates with rates on the 10-year U.S. Treasury note.
Additionally, there would be a capped interest rate of 8.25% for undergraduates and 9.25% for all other loans.
Republicans would get a link between the financial markets and borrowing terms through this proposal.
Democrats would get a guarantee that interest rates would not reach 10%, their proverbial line in the sand.
In 2013, Congress is expected to explore a number of tax reforms in order to address staggering deficits and a crippling $17 trillion in debt owed by the Federal government.
No proposed tax reform will be more controversial this year than attempts to alter the Home Mortgage Interest Deduction (HMID).
Considered the holy grail of tax deductions, the annual tax break to homeowners, which provides more than $100 billion a year in tax relief, could see significant changes, thus affecting the finances of millions of Americans.
But in order to understand how these changes could affect you, one needs to understand how this tax break became so monstrous in the first place, and what the impact of such proposals could have on the housing markets.
In fact, this very issue proves why even grander tax reform is necessary right now in the United States.
Today (Monday) federally subsidized Stafford student loan interest rates doubled from 3.4% to 6.8% after Congress failed to reach that would've maintained lower rates by the July 1st deadline.
Monday also marks the beginning of the Independence Day congressional recess, sparking outrage among student advocates as Congress goes on recess without resolving this important issue.
Congress could retroactively "fix" the damage done by the soaring rate increase, but so far no deal is in sight.
The House has already passed a student loan proposal, but the Senate remains divided.
Particularly, Senate Democrats are divided amongst themselves over two different plans, and cannot yet present a strong front on the issue.
Sens. Kay Hagan (D-NC) and Jack Reed (D-RI) have a plan that would extend the 3.4% rate for another year, while also retroactively reducing the rate.
But a bipartisan group of Senators has a different, more long-term solution. They want to permanently tie student loan interest rates to the 10-year Treasury note borrowing rate.