By: Cody Nelson

A bipartisan plan to lower recently raised student loan interest rates is taking shape in Congress.

The Associated Press reports lawmakers are considering a deal that would tie the interest rates on new student loans to the 10-year Treasury note, plus an additional percentage to account for administrative costs.

Under the new plan, the rate for subsidized Stafford loans — the most common federal student loan — would be about 4 percent for students borrowing this fall, the AP reports, with a cap of 8.25 percent for future years.

More than 14,300 University of Minnesota students took out subsidized Stafford loans in 2012, collectively worth about $54.7 million.

University officials have expressed support for a market-based plan on student interest rates.

"I am very glad that Congress has continued to work on this issue and appears to be prepared to put into place a long term fix, which protects both students and tax payers,” University Student Finance Director Kris Wright said in an email.

Many different proposals floated around Congress in recent weeks, but none of them passed.

Interest rates on the subsidized Stafford loan jumped to 6.8 percent on July 1 after Congress failed to act before its deadline.

A Democrat-backed bill to bring rates back down to 3.4 percent, the level for the past two years, failed on Wednesday in a close vote that fell mostly along party lines.

The tentative deal, however, is similar to a White House-backed plan and to a Republican bill, which passed the House in late June but didn’t get Senate approval.

An aide from U.S. Sen. Richard Burr’s, R-N.C., office said lawmakers are still waiting on a report from the Congressional Budget Office before taking official action on the plan. The CBO analysis could be complete as soon as late Thursday.

The tentative deal would make the unsubsidized Stafford loan cheaper than the current 6.8 percent rate for undergraduates, but higher than last year’s rate of 3.4 percent.

If Congress doesn’t act soon, the Joint Economic Committee says it could cost each student taking out subsidized Stafford loans this fall an extra $2,600.  

-The Associated Press contributed to this report.