After weeks of tough negotiations, it appears a bi-partisan group of Senators have reached a deal that will save money for millions of students.
Democrats and Republicans have reached a tentative deal to lower the interest rates on new student loans. The rates jumped July first from 3.4 percent to 6.8 percent.
A new bill could be announced as early as Thursday, and and while students going to college this fall will save money, the rates are likely to increase when students leave campus in the spring.
Senate aids say the new deal ties Stafford loans to the 10-year Treasury Note. Rates will increase as the economy improves, but Democrats won a protection for students so rates would never climb higher than 8.25 percent for undergraduate students. Graduate students rates max out at 9.5 percent, and parents borrowing for their students will pay no more than 10.5 percent.
Sources say President Obama has signed off on the compromise.
"We'll wait to see what's produced before we judge it. But obviously the President is very concerned about this issue," White House Press Secretary said Jay Carney.
The House passed its version of the student loan fix back in May and Republicans have been using the issue to hammer Senate Democrats ever since. The Senate deal is close enough to the House bill that there is optimism the two chambers can agree on a final version.
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