The U.S. Senate has approved legislation that would provide a short-term fix for the interest rates of federal student loans. If the legislation passes the U.S. House of Representatives current students would pay lower interest rates. But, there is a catch.

NPR reports that: “Undergraduates this fall would borrow at a 3.9 percent interest rate. Graduate students would have access to loans at 5.4 percent, and parents would borrow at 6.4 percent. The rates would be locked in for that year’s loan, but each year’s loan could be more expensive than the last. Rates would rise as the economy picks up and it becomes more expensive for the government to borrow money.”

Thus short-term aid for current students will translate into higher interest rates for future college students. “The bipartisan proposal would link interest rates on federal student loans to the financial markets, providing lower interest rates right away but higher ones later if the economy improves as expected,” according to NPR.

Senate Democrats and Republicans are essentially following the House’s lead here, since the Republican-led House already passed a similar bill.

The bill is expected to become law, since President Obama has stated that “this compromise is a major victory for our nation’s students.”

Perhaps, but only if another law is drafted to lower interest rates for future student loan payments. Otherwise, undergrad students may end up paying as much as 8.25 percent interest on their loans in the coming years, while graduate students would have a cap of 9.5 percent. Parents who take out loans for their children’s education could pay up to 10.5 percent.

Senator Elizabeth Warren (Democrat of Massachusetts) opposed the bill, saying “that’s the same thing credit card companies said when they sold zero-interest rate credit cards. … The bill comes due.” According to Warren, “all students will end up paying far higher interest rates on their loans than they do now.”

The Boston Globe reports on Warren’s opposition to the bill.  NPR and the Chronicle of Higher Education report on the bill’s passage.

Undergraduate and graduate students at Northern Illinois University will want to follow these developments closely.