UPDATE: Student loan rate deal hits snag; negotiations continue

Update, 9:35 a.m., Friday:

A bipartisan group of senators was close to reaching an agreement Thursday on how to set federal student loan interest rates, but then they learned that their plan could cost the government $22 billion over the next decade. That restarted negotiations yet again. The full story is here.

Original post:

A bipartisan group of senators reached a tentative agreement on Thursday to change the way the federal government sets interest rates for its education loans.

The negotiations followed a failed procedural vote on another student loan bill on Wednesday.

The bipartisan group proposes to set the rates based on the market, instead of having a fixed rate for years on end, and to impose a cap to prevent those rates from going too high, according to two aides with knowledge of the negotiations.