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

(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. (Read more college stories.)

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