Deal on Student Loans Would Set Cap

By: AP
By: AP

WASHINGTON (AP) -- A deal to lower interest rates on student loans is coming together one day after a bipartisan group of senators huddled at the White House with President Barack Obama.

The compromise taking shape Wednesday would peg interest rates to the financial markets. The framework would give students a better deal now, but they could face higher rates if the economy improves.

During the latest round of negotiations, senators agreed to an 8.25 percent cap on how rates could climb on undergraduates. Graduate students would see their rates capped at 9.5 percent, and parents who help their children would borrow at rates no higher than 10.5 percent.

The details are described by Republican and Democratic Senate aides who insist on anonymity because they are not authorized to discuss negotiations by name.

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