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Student loans: Bipartisan reform heads for passage after 81-18 Senate vote (+video)

Congress is set to notch a significant victory on student loans after the bipartisan Senate vote. Sen. Tom Harkin, who initially opposed the measure, hailed the 'hard fought' compromise.

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Congress is set to notch a significant victory after the Senate passed a bipartisan reform of the nation’s student loan system Wednesday evening with a vote of 81-18.

“Any way you look at it, this is a good deal for students and a good deal for their families,” said Sen. Tom Harkin (D) of Iowa. “That’s the way this place should run, on compromise. Legitimate, hard fought – but on compromise.”

The compromise was forged by a bipartisan group of senators including Republicans Richard Burr of North Carolina, Tom Coburn of Oklahoma and Lamar Alexander of Tennessee alongside Democrats Joe Manchin of West Virginia, Tom Carper of Delaware, Dick Durbin of Illinois, and independent Angus King of Maine (who caucuses with Democrats). President Obama also backed the measure.

Among the 18 senators voting against the bill were 17 Democrats and one Republican. The House is expected to pass the legislation, which closely tracks a proposal passed by the GOP-held chamber last month and a similar plan in Mr. Obama’s budget proposal, before adjourning for the August recess.

The compromise will fix undergraduate loans to the interest rate on 10-year Treasury bonds plus 2.05 percentage points up to a maximum of 8.25 percent. Graduate loans would add 3.6 percentage points to the 10-year T-bill up to 9.5 percent, and loans for parents would be offered at a spread of 4.6 percentage points to the same benchmark up to 10.5 percent.

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