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Congress Reaches Deal on Student Loan Impasse

Under the agreement reached Friday interest rates on new student loans will remain at 3.4 percent.

With its July 4 vacation looming Congress on Friday finally reached a deal on the student loan debate, capping the interest rate on new federally-backed loans at 3.4 percent.

That agreement, reached before a July 1 deadline that would have seen student loan rates double, is only good for one year however, meaning lawmakers will likely resume debate again next spring on the contentious issue of how to make higher education affordable for students in the U.S.

Connecticut's congressional delegation generally criticized the deal, the blog Capital Watch reports today, though Rep. Joe Courtney, D-2nd District, said in an interview with the Hartford Courant that the agreement is remarkable given the overall bitterly partisan nature in Congress these days.

Others, such as House members Rosa DeLauro of New Haven and John Larson of East Hartford, said the deal provides only a temporary fix to the problem of making college more affordable.

While both Republicans and Democrats in Congress have said they back finding a way to keep student loan rates from doubling by July 1, both sides have debated the issue for months without finding agreeement. Republicans have said they are concerned about the how to pay the $6 billion costs of keeping loan rates stable.

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