The clock is ticking loudly as Congress looks for a deal to bring back low interest rates on student loans.

Lawmakers and their aides are continuing talks about how they can restore 3.4 percent interest rates on subsidized Stafford student loans and retroactively undo the doubling of those rates.

Some suggested Wednesday that compromise was at hand, while others tried to shame their political rivals into agreement.

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A Senate vote to extend the 3.4 percent rate for another year failed to clear a procedural hurdle Wednesday.

If fresh negotiations prove fruitless, millions of students returning to campus next month will find borrowing terms twice as high as when school let out. Without congressional action in the coming weeks, the increase could mean an extra $2,600 for an average student returning to campus this fall, according to Congress' Joint Economic Committee.

"We must focus our attention now on a long-term solution such as the president supports, the House of Representatives has passed and a group of Republican, Democratic and independent senators have proposed," said Sen. Lamar Alexander, the top Republican on the Senate education panel.

Alexander was pointing to a bipartisan compromise that was emerging as a potential blueprint for a fix. That plan, which borrowed from a bill the Republican-led House has already passed and incorporates elements of President Barack Obama's budget proposal, would link interest rates on student loans to the financial markets.

The proposal was the subject of a meeting Wednesday night with leaders from both parties about next steps. That session in Democratic Sen. Dick Durbin's office raised hopes that a compromise could be shaping up.

Once called unacceptable by Senate Democrats, the idea of linking the loan rates to the markets is getting a second look, at least as a temporary fix. In the short term, the proposal provides a deal for students, but if the economy improves as expected, rates would rise even higher than the current 6.8 percent.

Lawmakers could seek a more lasting solution if, as expected, they take up an overhaul of the Higher Education Act in the fall.

Sen. Tom Harkin, chairman of the Senate Health, Education, Labor and Pensions Committee, suggested he was willing to negotiate something immediate with an eye on broader action in the fall.

A Harkin ally said compromise is possible if Republicans are willing to yield as well.

"I will continue to work hard to reverse this senseless rate hike," said Sen. Jack Reed, D-R.I., who helped push an unsuccessful extension measure. "Ultimately, we'll need a bipartisan solution, but first Congress will have to do its homework. Republicans will have to come to the table and agree to address the bigger picture of college affordability in a meaningful and comprehensive way."

Republican Rep. John Kline of Minnesota, chairman of the House Education and the Workforce Committee, blamed a cadre of Democrats for being "completely unwilling to compromise."

The rate increase does not affect many students right away. Loan documents generally are signed just before students return to campus, and few students went back to school over the July Fourth holiday. Existing loans were not affected, either.

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