WASHINGTON, D.C. -- College students may soon be borrowing money at a lower interest rate.
On Wednesday, the U.S. Senate approved a bipartisan student loan deal.
It reduces the rate for students heading to college in the fall from 6.8 percent to 3.8 percent. The rate was 3.4 percent before it doubled on July 1.
Before the vote, Senator Dick Durbin explained what the new rate will mean for incoming students.
"We went to the average student, the undergraduate student in America. Here is what it means. It means if you don't lower it to 3.8 percent, if you keep it at 6.8 percent, it means that student over a course of four years of undergraduate education will pay an additional $2,000 to $3,000 in interest. Why would we want to do that?" said Durbin, (D) Illinois.
However the compromise does come with a stipulation, the interest rate would be tied in with market prices. If prices on the market rise, so will the student loan rate.
The bill now heads to the U.S. House for consideration.