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Washington (AP) - House lawmakers are ready to pass legislation that links student loan rates to the financial markets in spite of a veto threat from President Barack Obama.
Supported by Republicans, the bill would avoid a rate increase for students with new subsidized Stafford loans if lawmakers pass it, as expected, on Thursday. Democrats generally opposed the measure, which would provide some students a deal in the first years of the new system before ratcheting up interest rates later.
"As the economy continues to recover and at a time when market interest rates are at historic lows, more than 7 million students who rely on these loans to finance postsecondary education should not be burdened with additional college debt as they seek to graduate, launch a career or a business, start a family or buy a house," the White House Office of Management and Budget said in a memo announcing its opposition.
The top Republican on the Education Committee, Rep. John Kline of Minnesota, said Obama was standing against many of the ideas he included in his own budget.
"The legislation is based on the president's own proposal and provides a solid basis for negotiation through the legislative process," Kline said.
Interest rates on new subsidized Stafford loans are set to double, from 3.4 percent to 6.8 percent, for new loans on July 1. Lawmakers said they wanted to avoid that but were divided on how, exactly, to accomplish that. With most lawmakers set to leave Washington for the Memorial Day holiday, time is running short.