WASHINGTON, July 17 U.S. senators reached a deal
on Wednesday to temporarily hold interest rates on student loans
at lower levels as they raced to get the measure completed
before an August deadline, a Senate aide said.
An aide for another senior senator said an outline of the
plan had begun to emerge, but no deal had been reached and no
vote on it was set yet.
Interest rates on new federal Stafford loans doubled to 6.8
percent this month when lawmakers failed to meet a July 1
deadline to prevent an automatic increase.
According to details of the Senate plan, students would see
interest rates dialed back to 3.4 percent for a couple of years,
but then rates could be allowed to rise sharply.
Undergraduates would see loans go as high as 8.25 percent
after 2015, graduates would face rates as high as 9.5 percent,
and parents would face rates as high as 10.5 percent.
The plan would cut the federal deficit by $715 million over
10 years, said the first aide, who spoke on the condition of
Last week, the Senate blocked a bill that offered a
temporary fix for students who face a steep increase in loan
rates. Senators voted 51 to 49 in favor of the bill, falling
short of the 60 votes required for passage.
The bill would have frozen interest rates for undergraduates
at 3.4 percent for a year while lawmakers work on a long-term
Senators hope to finish the deal before the August summer