AP Sources: Senators Reach Deal On Student Loans - 47 ABC - Delmarva's Choice

AP Sources: Senators Reach Deal On Student Loans

Posted: Updated:

WASHINGTON D.C. - Senators have reached a bipartisan deal to restore lower interest rates on student borrowers.
    
The breakthrough came Wednesday, one day after lawmakers huddled with President Barack Obama at the White House. Lawmakers are expected to vote as early as Thursday on the deal that would lower rates before students return to campus.
    
The deal would offer students lower interest rates through the 2015 academic year but then rates were expected to soar. Undergraduates could face rates as high as 8.25 percent, while graduate students would see rates as high as 9.5 percent and parents' rates would top out at 10.5 percent.
    
The deal is described by Republican and Democratic aides who insist on anonymity because they are not authorized to discuss the ongoing negotiations by name.
   
    
The bipartisan proposal is the latest to emerge from near constant work to undo a rate hike that took hold for subsidized Stafford loans on July 1. Rates for new subsidized Stafford loans doubled from 3.4 percent to 6.8 percent, adding roughly $2,600 to students' education costs.
    
Lawmakers and their top aides have been tinkering with various proposal - nudging here, trimming there - trying to find a deal that avoids added red ink for students and the government alike.
    
The rate hike did not affect interest rates on existing student loans for undergraduate students, graduate students or parents.
    
Lawmakers from both parties have tried to restore subsidized Stafford loan interest rates without adding to the deficit. To accomplish that, they have been tinkering with rates on all federal direct lending programs. In most cases, they have linked rates to the financial markets; the result has been lower rates in the short-term but larger bills for future classes.
    
Undergraduates last year borrowed at 3.4 percent or 6.8 percent, depending on their financial need. Graduate students had access to federal loans at 6.8 percent and parents borrowed at 7.9 percent.
    
Under the deal being considered, all undergraduates this fall would borrow at 3.85 percent interest rates. Graduate students would have access to loans at 5.4 percent and parents would be able to borrow at 6.4 percent.
    
But if the economy improves as congressional economists predict, rates would climb in coming years.
    
The details were still subject to change and aides on Wednesday said previous agreements on student loans have fallen apart after the Congressional Budget Office has returned estimates on how much the system would cost over the next decade.
    
Lawmakers from both parties met with Obama and Vice President Joe Biden a day earlier at the White House. An outline of an agreement seemed to be taking shape Tuesday, with Democratic Sen. Dick Durbin of Illinois and Republican Sen. Lamar Alexander of Tennessee guiding the talks.
    
Sen. Tom Harkin, the Iowa Democrat who chairs the Senate's education panel, said the caps on interest rates were still too high. That seemed to again derail the talks.
    
Sen. Joe Manchin, D-W.Va., Sen. Richard Burr, R-N.C., Sen. Tom Coburn, R-Okla., and Sen. Angus King, I-Maine, were also part of the negotiations on Thursday.
    
Senators returned to talks on Thursday in Durbin's office although Harkin continued to object to the high rate on caps.
    
The House has already passed student loan legislation that also links interest rates to the 10-year Treasury note. If the Senate can reach a deal, the differences between its version and the House version could be resolved before students return to campus this fall.
    
So far, few students have borrowed for fall classes. Students typically do not take out loans until just before they return to campus and Congress still has time to restore the lower rates.
   

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Local NewsDelmarva HeadlinesMore>>

  • Young Firefighters Learn From Laurel Inferno

    Young Firefighters Learn From Laurel Inferno

    Saturday, April 19 2014 6:12 PM EDT2014-04-19 22:12:31 GMT
    Owners called firefighters to burn down dilapadated homeOwners called firefighters to burn down dilapadated home
    LAUREL, Del. - A house went up in flames Saturday morning, just off of Rt 13 in Laurel. Luckily...it was just a training exercise.A rep from the Laurel fire department told 47 ABC, the landowners called the department to help them get rid of the house, which was far beyond repair. It wasn't a hassle for the firefighters, in fact, they say it was a pretty good training opportunity."It does help us to learn how to fight the fire...what to do, how to shut the roadways down," says Douglas Butler ...More >>
    LAUREL, Del. - A house went up in flames Saturday morning, just off of Rt 13 in Laurel. Luckily...it was just a training exercise.A rep from the Laurel fire department told 47 ABC, the landowners called the department to help them get rid of the house, which was far beyond repair. It wasn't a hassle for the firefighters, in fact, they say it was a pretty good training opportunity."It does help us to learn how to fight the fire...what to do, how to shut the roadways down," says Douglas Butler ...More >>
  • Rt. 50 South Closed In Easton

    Rt. 50 South Closed In Easton

    Saturday, April 19 2014 5:48 PM EDT2014-04-19 21:48:13 GMT
    EASTON, Md. - Easton Police have confirmed that Route 50 south is closed at Airport Road due to an accident.More >>
    EASTON, Md. - Easton Police have confirmed that Route 50 south is closed at Airport Road due to an accident.More >>
  • Documents Detail Another Delayed GM Recall

    Documents Detail Another Delayed GM Recall

    Saturday, April 19 2014 4:57 PM EDT2014-04-19 20:57:07 GMT
    DETROIT (AP) - Government documents show that General Motors waited years to recall nearly 335,000 Saturn Ions for power steering failures despite getting thousands of consumer complaints and warranty repair claims.More >>
    DETROIT (AP) - Government documents show that General Motors waited years to recall nearly 335,000 Saturn Ions for power steering failures despite getting thousands of consumer complaints and warranty repair claims.
    More >>
  • ContestsMore>>

  • Spring Gas Giveaway

    Spring Gas Giveaway

    Let WMDT fill up your tank! It's time for our Spring Gas Giveaway! More >>
    Enter for your chance to win a $100 Exxon/Mobil Gas Card!More >>
  • Teacher Who Makes A Difference

    Teacher Who Makes A Difference

    The WMDT 47 Teachers Who Make a Difference Contest is Sponsored by Accurate Optical: "Encouraging children of all ages to come in for an annual eye exam to help them see better in school." Each month weMore >>
    The WMDT 47 "Teachers Who Make a Difference" Sponsored by Accurate Optical Encouraging children of all ages to come in for an annual eye exam to help them see better in school.More >>
Powered by WorldNow
Powered by WorldNow All content © Copyright 2000 - 2014 WorldNow and WMDT. All Rights Reserved. For more information on this site, please read our Privacy Policy and Terms of Service.