States, cities, hospitals and major public agencies are getting battered by wild interest rate swings in one sector of the municipal bond market. They are scrambling to refinance the debt as they add up the damages to their budgets and nurse some hard feelings.

The highest-profile fallout so far is the tightening of the student-loan market. Agencies in Pennsylvania, Iowa and Michigan have suspended new student loans.

Budgetmakers had planned on paying around 4 percent on borrowed funds as recently as December. Now they are searching for ways to fit rates of 5 percent to 10 percent into their budgets. So far, most affected institutions appear to be withstanding the tens of millions of dollars in additional costs without laying off workers or shutting down crucial services.