A day after a bipartisan group of Senators met with President Obama at the White House, a tentative deal was announced Wednesday that would offer college students lower rates on loans this fall--but those rates would likely increase in the future.
According to a report from USA Today, the deal would offer students lower interest rates on loans through the 2015 academic year, but would then climb even higher than the rates were at this past spring, when they doubled from 3.4 percent to 6.8 percent.
Officials say that the tenative deal that was reached on Wednesday would base fixed-interest rates on loans on the 10-year Treasury note, plus an additional percentage.
NBC News reports that according to the proposed deal, student loans would be made available this fall at 3.86 percent for undergrads, 5.4 percent for graduate students and 6.4 percent for parents.
In terms of long-term interest rate caps, however, undergraduate students would be borrowing at 8.25 percent, graduate students at 9.25 percent and parents at up to 10.5 percent.
However, if the economy continues to improve in coming years as is expected, these rates could climb even higher. The deal that was reached on Wednesday would put a cap on how high those increased might go, which was reportedly a key provision of the deal.
The House of Representatives has also been at work on student loan rates and has passed legislation that would also link interest rates to the 10-year Treasury note. It's expected that the Senate and House versions of these student loan deals would be resolved before the school year begins this fall.
According to MSN, a vote on the Senate deal could come as early as Thursday, but would most likely be pushed back until next week.