(CNN) — President Barack Obama signed bipartisan legislation into law Friday that will temporarily reduce rates people pay on their student loans from the government.
In the immediate, interest rates will go down to 3.86% for undergraduate students and 5.41% for graduate students.
Obama and members of Congress have hailed the legislation, saying that it will save college students significant sums on their loans.
The long-term savings for students are less clear however. The legislation allows for rates to go up with increases in market rates, with the undergraduate rate capped at 8.25%.
Undergraduate rates had doubled from 3.4% to 6.8% July 1 after Congress failed to reach an initial deal. The House finally passed the new legislation 392 to 31 at the end of July after the Senate passed its version a week earlier. The new rates will apply retroactively to all loans taken out after July 1.