By John Sandman NEW YORK ( MainStreet) -- The Senate is working on a new script that could re-write the student loan drama, which supposedly came to a climax yesterday when seven million students with subsidized Stafford loans watched their interest rates jump from 3.4% to 6.8%. A smorgasbord of bills dealing with interest rate hikes have been in an out of committees and on and off the table this year. A new attempt is S. 1238, introduced yesterday by Senators Jack Reed (D-RI) and Kay Hagan (D-NC) that would freeze current rates for one year. A Reed spokesperson said the bill would pay for itself by closing a tax loophole. But with Congress having left town for the July 4th holiday, a vote won't take place in the Senate until at least July 10. The rate freeze could be made retro-active to July 1. As with the others, the bill addresses the cost of the loans and interest rates are the key metric. The Reed-Hagan Bill was preceded by The Bipartisan Student Loan Certainty Act last week. Obama administration's proposal. The Obama plan and the Alexander-Burr-Coburn-King bill both link rates to the 10-year Treasury bill; the market, not Congress, would set the rates, which would be fixed for whatever the rate was when the loan was made. That lowers the rates for borrowers this fall but lets them rise in the future. The Congressional Budget Office projects that unsubsidized Stafford loans will be over 6.8% in 2016 and 8% by 2018. Under the Obama and the Republican plans, there would be no limit on interest rates for the first time. Some Democrats, including chairman of the Health Education, Labor and Pensions Committee Senator Tom Harkin of Iowa, have been unwilling to compromise on their proposal to extend existing rates for another two years and revisit the issue in 2015. Again, the underlying issue is a cap on rates. "Senator Harkin is not interested in proposals that ask low- and middle-income college students and their families to pay even more in interest to reduce the deficit and tie student loans to unrestricted interest rates," said Harkin spokesperson Allison Preiss. "Any proposal that lacks a cap is a nonstarter." Veteran congressional observers say that doing this deal on July 10, then making it effective on July 1, was doable. What's more, new student loans probably wouldn't close until September and certainly after July 1, meaning a post-July 1 rate fix could be baked in to a new agreement. The rates on loans made before July 1 won't be affected in any event.