News Summary: Deal would restore lower loan rates

AP News
Posted: Jul 19, 2013 12:04 PM

VOTE NEXT WEEK: A compromise deal on student loans was expected to come to a vote next week, well before students returning to campus this fall have to sign their loan agreements.

RATE CAP: The Senate deal pegs interest rates on new loans to the financial markets, but caps potential increases. The rates for this fall of 3.9 percent for undergraduates, 5.4 percent for graduate students and 6.4 percent for parents may climb as the economy improves, but won't go higher than 8.25 percent, 9.5 percent and 10.5 percent, respectively.

ROUND TWO: The deal is similar to a bill that passed the House earlier this year and is expected to win approval in the lower chamber. But the Senate may revisit the agreement this fall when the Higher Education Act is due for a rewrite.