The White House has threatened to veto a student loan bill sponsored by U.S. Rep. John Kline, R-Minn., which would replace the current fixed rates with floating rates tied to government borrowing costs.
Kline expressed disappointment in the White House action, saying his bill is based on President Obama’s own proposal to move to a market-based interest rate, rather than one dictated by Congress. The House is scheduled to vote on Kline’s plan on Thursday.
But Democrats and student groups worry about subjecting students to variable interest rates without easier repayment terms and other protections in the White House plan.
Democrats have rallied around a plan to freeze the current government-mandated rate of 3.4 percent for two years to buy time for the long-term solution both sides say they want. Without some agreement, the rate is scheduled to double to 6.8 percent on July 1.
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