U.S. News: Student Debt Sparks a Fight
Republican and Democratic lawmakers agreed this week to approve new subsidies for college students but clashed on how to offset the $6 billion cost of the measure so it doesn't add to the federal deficit, setting up a potential election-year showdown over budget policy.</br></br>House Republicans plan to vote as early as Friday to freeze the interest rates on certain federal student loans at 3.4% for the year that starts July 1. The lawmakers plan to make up the unrealized revenue by tapping money that was directed by the 2010 health-care overhaul to fund investment in illness-detection procedures. Without congressional action, the rate on the loans would double on July 1 to the 6.8% level that applies to the most commonly used type of federal student loan. Loans issued before July 1wouldn't be affected.</br></br>House Democrats are proposing to find the $6 billion by removing tax breaks for oil and natural-gas companies. Senate Democrats will suggest raising the money by ending a tax provision benefiting small-business owners, aides said.</br></br>With three different proposals and no clear path to consensus, the debate could continue until the June 30 deadline for congressional action.</br></br>President Barack Obama, seeking to energize young voters, called on Congress this week to renew the measure, which enables college students who demonstrate financial need to borrow up to $5,500 a year at an interest rate of 3.4% -- much lower than typical private loans.