House Votes to Overhaul Student Loans

Increases Pell money, slashes interest rates on federal loans
By Colleen Barry,  Newser Staff
Posted Jul 12, 2007 6:10 AM CDT
Harvard University graduates from left, Kara O'Reilly of NewYork, Maria Horch of New York, and Zach Puchtel of Minnesota celebrate their degrees at Harvard University's 2007 Commencement exercises on...   (Associated Press)
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(Newser) – The House OKed a major shakeup of student loans yesterday, in a plan that will eliminate $19 billion in subsidies to lending companies and send the cash directly to students. The bill will increase funding for Pell grants and cut the interest rates on all federally-funded loans—assuming it survives a veto threat from the White House.

The bill passed 273-149. Dems are calling the measure the “single largest effort to help students pay for college since the G.I. Bill," and though 47 Republicans said yay, others slammed it as a welfare act. The debate was strident and boisterous, especially as conservatives launched an abortive counter-effort to increase Pell cash but keep interest rates up.