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Senators try again to lower student loan rates

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Photo -   Prospective students tour Georgetown University's campus in Washington, Wednesday, July 10, 2013. The defeat of a student loan bill in the Senate on Wednesday clears the way for fresh negotiations to restore lower rates, but lawmakers are racing the clock before millions of students return to campus next month to find borrowing terms twice as high as when school let out. (AP Photo/Jacquelyn Martin)
Prospective students tour Georgetown University's campus in Washington, Wednesday, July 10, 2013. The defeat of a student loan bill in the Senate on Wednesday clears the way for fresh negotiations to restore lower rates, but lawmakers are racing the clock before millions of students return to campus next month to find borrowing terms twice as high as when school let out. (AP Photo/Jacquelyn Martin)
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WASHINGTON (AP) — Senators are back to the starting line in search of a compromise to reduce interest rates on student loans. Lawmakers were spooked by a $22 billion price tag that accompanied a potential deal.

Lawmakers from both parties had tentatively agreed on a proposal that offered Democrats the promise that rates would not reach 10 percent and gave Republicans a link between borrowing terms and the financial markets.

But that deal's $22 billion in red ink over a decade proved disqualifying and sent lawmakers back to square one.

Lawmakers are looking for a deal to undo the rate increase on subsidized Stafford loans, which doubled to 6.8 percent on July 1. If lawmakers reach an agreement before students return to campus, the lower rates could be restored.

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