Lifestyle & Belief

Senate reaches deal on student loan rates: reports


A young man holds a sign during an Occupy Wall Street rally against the high cost of college tuitions April 25, 2012 in New York. Scores of students and former students gathered to complain about the high cost of tuitions and college loans.



Senators have reached a bipartisan deal to restore lower student loan interest rates, according to several reports.

Sources told The Associated Press the breakthrough came Wednesday evening, one day after lawmakers met with President Barack Obama on the issue at the White House.

The deal would offer students lower interest rates through the 2015 academic year.

After that, rates could reach as high as 8.25 percent for undergraduate students, 9.5 percent for graduate students and 10.5 percent for parents under the agreement.

More from GlobalPost: Have student loans? What the rate hike means for you

“It would save students in 11 million families billions of dollars,” Tennessee Sen. Lamar Alexander told Politico of the deal. “We’d like to be able to do this together and we hope that we can come to a decision right away because families need to make their plans.”

A formal announcement was likely on Thursday, and possibly even a vote.

Interest rates on federal student loans doubled to 6.8 percent on July 1 following a stalemate, and the Senate has been unable to pass a bill to deal with the issue. 

Reports first surfaced last week that a deal was close, though those talks hit a snag when initial cost estimates came in too high.

More from GlobalPost: Student loan rates set to double on July 1