After pledging early action on higher education in 2007, the House of Representatives on Wednesday approved a plan to cut student loan interest rates by half over a five-year period despite strong White House opposition.
By a 356-to-71 vote, lawmakers approved cutting interest rates on federally subsidized loans to 3.4 percent over five years. Some lawmakers originally favored an immediate cut to the 3.4 percent target but opted for a gradual change due to costs. If implemented immediately, the rate change would have cost $30 billion, instead of $6 billion as projected with the five-year option.
“Today is a great day for anyone who believes in the American dream,” said Rep. Linda Sanchez, D-Calif., at a news conference before the vote. Sanchez said she has a unique perspective on the issue in Congress because she is still repaying her own student loans.
“This bill will help less advantaged and minority students pay for their education,” she added.
Before the vote, the Bush administration said it opposes the rate change, which now goes to the Senate. The White House said the change mainly would help those who have already graduated from college, not low-income students still deciding whether to go on to higher education.
“Reducing student loan interest rates would direct Federal subsidies to college graduates, not to students and their families who are struggling to meet current and future educational expenses,” the Bush administration said in a statement.
While it did not threaten a veto, the White House said it prefers other alternatives such as increased need-based grant aid to students. “Student debt loads have soared in recent years, and it is not clear that encouraging more loans is a wise course,” it said.
