The aides predicted a deal would be reached and the legislation approved before the July 1 deadline when Stafford loans are set to double from 3.4% to 6.8%. …

A Democratic aide said negotiators were close to an agreement that would draw ideas from both parties for offsetting the costs. They would include higher fees businesses would pay to the federal government to insure pensions, something that Democrats proposed. And limiting the length of time students get for an in-school interest rate subsidy, something Republicans proposed.

In the Republican-led House, leaders have publicly pressed for the Senate to pass their version of the bill, which draws money from a preventative health care fund in the health reform law. But they have also left open the option of bringing up for a vote whatever compromise Democrats and Republicans in the Senate reach before the deadline.