A bipartisan group of senators formally announced a student loan deal which will could help ease interest rates for the millions of students who will take out loans this academic year.
The bipartisan coalition met with President Obama Tuesday to discuss a solution to the student loan problem. Rates for subsidized Stafford loans doubled to 6.8 percent at the start of the month after the Senate failed to reach a solution by the July 1 deadline.
"This fall, students now will know that they don't have to pay 6.8 percent interest," Sen. Tom Harkin, D-Iowa, said in a news conference Thursday. "We have hammered out, I think, a great compromise here and to move forward."
"We've done here what the country expects us to do," Sen. Lamar Alexander, R-Tenn., said. "It's good news for 11 million students who are borrowing money to go to college."
Democrats won a guarantee, aides told ABC News, that rates would never climb higher than 8.25 percent for undergraduate students. Graduate students would not see their rates exceed 9.5 percent, and parents' rates would cap at 10.5 percent.
The House of Representatives passed a plan earlier this summer that linked rates to the 10-year Treasury note. The Senate now awaits a vote on the student loan compromise, which Senate Majority Leader Harry Reid indicated could come as early as today.
"With people processing their applications to go to school this fall, we should get it done as quickly as possible. It's possible we could do it today," Reid said on the Senate floor Thursday morning.