Congress close to deal on student loans

A deal is in the works that could extend reduced interest rates on student loans.

WASHINGTON (CNNMoney) -- Senate and House leaders said Wednesday they're close to an agreement to extend for one year the current low 3.4% rates on federal subsidized student loans.

Lawmakers have little more than three days to find a way to prevent interest rates from doubling to 6.8% on subsidized student loans, which would cost students on average an extra $1,000.

House Speaker John Boehner suggested he supports a Senate-negotiated deal to help students.

However, congressional aides warned that nothing will be final until a separate deal is completed on a long-stalled bill that would fund improvements to highways and other kinds of transportation.

"We're moving, I think, towards an agreement," Boehner said. "A lot of work has gone into this. It's not finished yet."

On Tuesday, top Senate leaders from each party indicated they had reached an agreement, but were waiting to hear whether House Republicans would accept the deal.

The White House issued a statement praising the Senate deal and pressed House Republicans to accept it.

"We're pleased that the Senate has reached a deal to keep rates low and continue offering hardworking students a fair shot at an affordable education," White House Press Secretary Jay Carney said in a statement.

For weeks, the sticking point has been how to pay the nearly $6 billion price tag to extend low interest rates another year.

Congressional aides say lawmakers are still discussing ways to pay for the extension, but they would include changes to the way companies fund pension programs. The plan would also limit how long students can go to school without accruing interest on subsidized student loans.

Senate Democrats said Boehner's office has been in close contact with Senate Minority Leader Mitch McConnell's office throughout the negotiations.

"The president has been largely uninvolved" in the talks, McConnell said. "But (Senate Majority Leader Harry Reid) and I have an understanding that we think will be acceptable to the House."