Politico: Senators reach deal on student loans

WASHINGTON, July 17 (UPI) -- U.S. Senate leaders Wednesday reached a deal on student loans and will schedule a vote by next week, sources told Politico.

A bipartisan group of negotiators said Wednesday they were confident their proposal, which would apply retroactively to students who have signed federal loans at higher rates that went into effect July 1, the Washington publication said.

"It would save students in 11 million families billions of dollars," said Lamar Alexander, R-Tenn. "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."

The deal would peg rates on new loans to 10-year treasury notes plus 2.05 percent for undergraduates, with an 8.25 percent cap, Politico said. For graduate students the terms would be 3.6 percent on top of the 10-year treasury note with a cap of 9.5 percent, and 4.6 percent for PLUS loans capped at 10.5 percent.

Stafford student loans are fixed-rate loans for undergraduate and graduate students attending college at least half-time. Rates doubled July 1, from 3.4 percent to 6.8 percent.