Washington (CNN) -- A bipartisan group of senators announced an agreement on a student loans package Thursday that would cap rates, ending a standoff that lasted months and broke through a July 1 deadline for finding a solution.
Under the compromise measure, undergraduate students would pay a rate of 3.85% next year on subsidized and unsubsidized Stafford loans. The plan would cap rates on loans to undergrads at 8.25%, for graduate students at 9.5% and parents at 10.5%.
"While this is not the agreement that any of us would have written, and many of us would like to have seen something quite different, I believe we have come a very long way on reaching common ground," Sen. Dick Durbin of Illinois, the Democratic whip in the Senate, said at a press conference Thursday.
Sen. Tom Harkin, the Democratic chairman of the committee that oversees federal education programs, also was present in announcing the deal. The Iowa senator had resisted for weeks agreeing to a plan unless it included caps on how high the interest rates on the loans could rise.
Speaking after Thursday's news conference, Harkin said lawmakers may revisit the student loans issue when his committee wades into altering the Higher Education Act in the next several months.
Even as Harkin praised the deal, he said he might reopen it as early as next year.
"Can we change it? Sure we can change it," Harkin told reporters. "This is not the Ten Commandments written in stone for God's sake."
"If we don't pass a Higher Education Act at least there is certainty in the future. If we pass a Higher Education Act, we might want to leave it the same we might want to change it a little bit. I don't know," he continued.
Republicans praised the plan. Sen. Tom Coburn of Oklahoma called it a "win-win for both students and taxpayers."
"Tying interest rates to the market allows students to take advantage of historically low rates while ensuring taxpayers will not have to foot the bill for arbitrary rates set by Congress," he said.
Student loan rates doubled July 1 from 3.4% to 6.8% after Congress failed to reach a deal averting the increase.
The agreement, if approved by the full Senate, would tie interest rates on a variety of government-backed loans to 10-year Treasury notes and would lock in surcharges paid to the government for administrative costs.
Senate Majority Leader Harry Reid said the upper chamber would vote on the deal "as quickly as possible."
The White House, which has been heavily involved in negotiations, backs the agreement, a Senate Democratic leadership aide said.