JACKSONVILLE, Fla. -- U.S. Senator Bill Nelson announced this week his intentions to file legislation that will counteract the recent hike in federal student loan interest rates for college students.

Nelson’s intended bill would cap loan interest rates for undergraduates at 4 percent, down from the current rate cap of 8.25 percent. The bill would also allow borrowers with preexisting loans at rates higher than 4 percent to refinance, something currently not allowed, as rates are fixed by law.

“If we really want to make higher education more accessible in this country, we have to make it more affordable,” Nelson said in a press release Wednesday. “If you can get a home loan at 4 percent, why can’t students get an education for the same rate?”

With the celebration of our nation’s independence comes new federal student loan rates that are set each year by Congress and go into effect on the first day of July.

This year’s announcement most likely came as a disappointment for a lot of soon-to-be college students, as both subsidized and unsubsidized fixed interest rates climbed to 4.45 percent, the highest they have been since July 2014.

In addition, unsubsidized loans for graduate students have increased to 6 percent, while PLUS loans for parents of undergraduate students increased to 7 percent.

The 0.69 percent increase seen in federal student loan interest rates was calculated using a formula that factors in the results from the 10-year Treasury Note auction held this May.

The auction this year resulted in a high yield of 2.40 percent, up from 1.71 percent the year before, indicating less investment in treasuries due to a higher trust in the national economy. Consequentially, this lowered bond prices and created higher interest rates across the board.

The yield is added to fixed margins based on the type of loan sought and college degree level. For undergraduates, the formula would be 2.40 percent plus the fixed margin of 2.05 percent, equaling 4.45 percent as the new interest rate.

Sen. Nelson's legislation would also attempt to eliminate fees associated with the processing of federal student loans.

The processing fee, which currently stands at 1.069 percent for all new subsidized and unsubsidized loans and 4.276 percent for PLUS loans, is taken out of the original loan amount. Meaning, the money received is less than the amount initially borrowed and charged interest on.

In addition to capping federal student loan rates for undergraduates, Nelson said Wednesday he plans to also cap the interest rates for graduate students at 5 percent and rates for parents of undergraduates at 6 percent.

Nelson said he plans to file the bill when the 115th Congress reconvenes the week of July 10.