Senate's Student Loan Plan Cuts Rates—for Now Undergrads would be able to borrow at 3.85% interest this fall By Matt Cantor, Newser User Posted Jul 18, 2013 6:37 AM CDT Updated Jul 18, 2013 7:49 AM CDT 13 comments Comments Senators appear to have agreed on a student loan plan. (Shutterstock) (Newser) – A Senate deal is set to lower interest rates on student loans for the next two academic years—but rates could climb after 2015, the AP reports after speaking to aides. Still, in the deal—set for a vote as soon as today—Democrats ensured that undergraduates would never face rates higher than 8.25%, while grad students won't see rates higher than 9.5%, and parents won't have to shell out more than 10.5%. Rates for several types of loans would be tied to 10-year Treasury notes, CNN adds; a House bill offers a similar measure. On July 1, rates for new unsubsidized Stafford loans jumped from 3.4% to 6.8%, the AP notes. This autumn, thanks to the deal, undergraduates would be able to borrow at 3.85% rates; graduates, 5.4%; and parents, 6.4%. A strengthening economy will see the rates climb. The deal is reportedly supported by Sen. Tom Harkin, whose backing likely means wider support among Democrats, CNN notes. The White House also supports the plan, according to a Senate Democratic aide.