House Clears Student Loan Bill; Bill, Which Links Interest Rates on Loans to Market Rates, Is Sent to Obama
WASHINGTON--The House voted overwhelmingly Wednesday to clear a bill that links interest rates on federal student loans to a market-based rate, ending a monthslong debate and sending the bill to the White House.</br></br>The House passed the bill by a vote of 392 to 31. The Senate passed the bill last week by an 81-18 vote. President Barack Obama, who lobbied for the legislation despite resistance from some liberal Democrats, is expected to sign it.</br></br>The legislation would tie the interest rate on federal student loans to the government's borrowing costs--specifically, the yield on the 10-year Treasury note. Stafford loans for undergraduates--the government's most widely used student-loan program--would be set about two percentage points more than the Treasury yield.</br></br>Student loans for graduate students and their parents would be set slightly higher than rates for undergraduates.</br></br>Passage of the bill resolves an acrimonious dispute in Congress stemming from a measure that expired July 1, which allowed the rate on some new student loans to double to 6.8%. Members from both parties had vowed to prevent the rate increase but disagreed over how to set rates over the long term.