This week the debate on student loan interest rates experienced a step forward. A bipartisan group of senators reached a deal on a long-term change to interest rates for all new federal student loans.

This agreement comes after interest rates on some loans doubled last week. Federally subsidized student loans increased to 6.8 percent from 3.4 percent

The agreement would tie the interest rate on new student loans to market conditions. Rates, based on the yield on 10-year Treasury bills, would vary from year to year, but be fixed over the life of the loan. Rates would be capped so they couldn’t rise indefinitely if interest rates spike: undergraduate loans would be capped at 8.25 percent, and graduate loans at 9.25 percent. Finally, the compromise would be retroactive, so students taking out loans after July 1 would get the new interest rate.

Final details on the interest rate are awaiting a score from the Congressional Budget Office this week. But the bipartisan group agreed that all undergraduate loans would be set at the 10-year Treasury yield plus 1.8 percentage points. For graduate loans, the rate would be the 10-year yield plus 3.4 percent; for Parent PLUS loans, the 10-year yield plus 4.5 percent.

If rates were based on Wednesday’s Treasury yield, undergraduate loans issued today would have an interest rate of 4.5 percent; graduate loans, 6.1 percent; and PLUS loans, 7.2 percent. All are lower than the rates for those loans under current law.

Setting a single rate for all undergraduate loans means that subsidized loans, which go to students determined to have financial need, would no longer have lower rates than unsubsidized loans, which are available to all undergraduates regardless of need. From 2007 until last week, subsidized loans had lower interest rates. The rate for unsubsidized loans has been 6.8 percent.

If the plan passes the Senate, the House of Representatives is likely to follow suit. A vote on the measure has not yet been scheduled.