Senate Strikes Deal on Student Loan Rates

After weeks of negotiations, Senate Democrats and Republicans have reached a $6.7 billion deal to prevent the interest rate on federal student loans from doubling this summer.

Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell announced the deal Tuesday, giving lawmakers a handful of days to speed it through the chamber before a July 1 deadline, the New York Times reports. Although neither party wanted to see student loan interest rates double, Congressional leaders struggled for weeks to agree on how to pay for the measure.

President Obama has campaigned heavily on the congressional stalemate over the student loan issue, college students to pressure their leaders on the Hill. Republicans, meanwhile, say that an agreement could have been reached earlier had Democrats not decided to make the loans a campaign issue. Besides, a compromise seemed nearly inevitable once Republican presidential candidate Mitt Romney called on Congress to extend the subsidized loans, Politico explains.

Senators reached the $6.7 billion target through compromise. Democrats suggested a "pension smoothing" plan that will raise more than $5 billion, and the additional funds come from a GOP-designed measure that would limit the length of time a student could receive the subsidized interest rate to 150 percent the average length of their program, for instance, six years for a four year degree.

Meanwhile, the bill has become part of an end-of-session Congressional laundry list as lawmakers try to link it to the other major legislation that needs extending, the highway bill, according to the Washington Post. House Republicans, led by Speaker John Boehner, worked into Tuesday evening trying to meld the two, which could make for quicker passage but is complicated by ongoing tensions over the highway bill.

"We’re very close to having everything done," said Reid. "But until we get everything done, nothing’s done."