A group of bipartisan senators struck a deal this week that may save new federal student loan borrowers from paying the controversial rate that took effect July 1.

That Stafford Loan rate doubled to 6.8 percent after Congress failed to pass legislation that would’ve kept the percentage low. 

Here’s how the Week explains the new proposal:

Under the compromise, undergraduates would pay 3.86 percent interest on both subsidized and unsubsidized federal loans in the upcoming academic year. After that, future interest rates on Stafford loans would match the yield of a 10-year Treasury note, plus an additional 2.05 percentage points. Those rates would be capped at 8.25 percent.

For graduate students’ loans, the deal would add 3.6 points to the Treasury rate, with a 9.5 percent rate cap.

The plan isn’t without its critics, particularly Democrats who didn’t like the idea of tying the student loans to Treasury notes. But Congress members and President Barack Obama say it’s better than nothing.

Read more here. 

— Alia Wong