Lawmakers Duke It out over College Loan Interest Rates

By Scott Sarvay
By Maureen Mespell

April 27, 2012 Updated Apr 27, 2012 at 7:17 PM EDT

WASHINGTON (Indiana’s NewsCenter) - A bill keeping student interest loan rates from doubling passed the House of Representatives Friday.

The House passed the interest rate reduction act with a 215-195 vote, led by GOP lawmakers who ignored a White House veto threat on the measure.

The White House and most Democrats oppose the $5.9 billion bill because of the way Republicans plan to cover its costs. The plan takes funds from preventive programs in President Obama's health care law.

The bill now heads to the Senate where it’s expected to be ignored.

Student loan debts can be crippling for college grads if the interest rate is allowed to double.

That’s why House Republicans are set to vote Friday on a GOP bill that would keep interest rates intact for another year. Republicans want to pay for it by cutting spending from the President's health care law.

But both Republicans and Democrats agree in theory that now is not the right time to raise federal student loan rates. But in Washington, it's never that simple. Lawmakers are battling over how to pay for preventing college loan interest rates from doubling from 3.4 percent to 6.8 percent in July.

This week, President Obama traveled to three battleground states and attacked Republicans for failing to introduce legislation to stop the increase.

President Obama says every American family should be able to afford a college education.

Senate Democrats believe they have the answer for how to keep interest rates the same. They want to raise taxes on the wealthy and erase subsides to oil and gas companies.

But Speaker John Boehner points out that President Obama is using taxpayer money to launch his election year attack.

The Obama administration says if the student loan interest rate doubles, it would cost low and middle-incomes students an average of $1000 over the life of their loan.

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