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Senators ready to restore lower college loan rates

  • Student-Loans-4

    FILE - In this July 10, 2013 file photo, prospective students tour Georgetown University's campus in Washington. The Senate could vote as early as Thursday on a bipartisan compromise that heads off a costly increase for returning students. (AP Photo/Jacquelyn Martin)

    ASSOCIATED PRESS

  • Student-Loans-5

    Sen. Tom Harkin, the Iowa Democrat who chairs the Senate's Education Committee, returns to the chamber at the Capitol in Washington, Tuesday, July 16, 2013. As a bipartisan group of senators inched closer Wednesday to a compromise that would reduce interest rates on student loans before classes resume, Harkin insists that the caps on interest rates were still too high. (AP Photo/J. Scott Applewhite)

    ASSOCIATED PRESS

  • Student-Loans-6

    FILE - In this June 23, 2013, file photo, the U.S. Capitol is seen in Washington. Heading off a costly rate increase for returning college students, a bipartisan group of senators reached a deal Wednesday, July 17, 2013, that would offer students better rates this fall but perhaps assign higher rates in coming years. The deal would offer students lower interest rates through the 2015 academic year but then rates were expected to climb above where they were when students left campus this spring. (AP Photo/J. Scott Applewhite, File)

    ASSOCIATED PRESS

WASHINGTON  — A bipartisan group of senators is announcing a deal that lets students dodge higher interest rates when they go back to campus this fall.

The group told reporters today they have reached a compromise that lowers the rates for all students who borrow from the federal government. The rates would be linked to financial markets, meaning interest rates would climb in coming years.

Democrats insisted on and won a cap on how rates could climb.

Democratic Sen. Dick Durbin of Illinois says the bill does not give any negotiator everything he sought. But it provides relief for students who were facing interest rates that doubled to 6.8 percent on new loans.

The House has already passed similar legislation and the differences could be resolved before students return to campus.

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