Tentative deal reached on student loan rates

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PHOENIX -- A tentative deal has been struck in the U.S. Senate to keep interest rates from going up any higher on student loans, at least in the short run.

Student loan rates doubled July 1 to nearly seven percent after Congress failed to reach a deal to stop the increase.

The new plan includes caps on loans to undergraduate students at 8.25 percent and graduate students at 9.5 percent. It caps loans to parents at 10.5 percent.

The agreement, if approved, would link rates to government bonds. Meaning, students will never have to pay more on their loans than the current interest rate for those bonds.

It's unknown when the Senate will actually vote on the bill, but it appears to be a step in the right direction.