WASHINGTON — The U.S. House passed a Rep. John Kline-sponsored bill to tie student loan interest rates to market rates on Thursday.
All but four Democrats opposed the bill, which would tie interest rates on federal student loans to the government’s cost of borrowing, plus a couple of points. The final vote was 221-198, and the Minnesota delegation voted along party lines.
The bill is similar to a plan proposed by President Obama, insofar as both tie interest rates to the market, but the GOP and White House remain apart on what the rates should actually be. The White House threatened to veto the bill on Wednesday.
Interest rates on federal subsidized student loans will double from 3.4 percent to 6.8 percent on July 1 absent congressional action. Lawmakers currently set the rates; Republicans have argued the rates should be market-based.
Congressional Democrats, including Senate leadership, prefer to extend the current interest rates for two years and reform them during a 2015 debate on overall federal higher-education policy. They argue Kline’s bill would make college more expensive for student borrowers.
Devin Henry can be reached at firstname.lastname@example.org.