Reports: Deal struck on student loan rates

Senators have reached a deal to restore lower student loan interest rates, according to multiple reports.

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Unidentified sources told The Associated Press that the breakthrough came Wednesday, one day after lawmakers huddled with President Obama at the White House.

An aide familiar with the talks told The Hill that there is no deal yet, but negotiators are close. The aide said, "it is possible to likely" that a deal will be announced Thursday.

Negotiators expect the package to be "close to deficit neutral," the aide said, adding that Sen. Tom Harkin (D-Iowa), the chairman of the Health, Education, Labor and Pensions Committee, has yet to sign off on anything.

Reports surfaced last week that a deal was close.

At that time, an agreed upon framework would provide a long-term fix for interest rates on Stafford student loans and would tie those rates to the fluctuations of the 10-year Treasury bond — similar to the approach adopted by House Republicans and laid out by the White House in its latest budget proposal.

However, the deal would also include a cap on individual student loans, in an effort to assuage wary Democrats concerned that an adjustable rate on student loans could drive them up to intolerably high levels.

Rates on undergraduate loans could only climb to 8.25 percent under that agreed upon framework, according to an aide familiar with the talks.

--Alexander Bolton contributed to this report.