Republican and Democratic lawmakers agreed this week to approve new subsidies for college students but clashed on how to offset the $6 billion cost of the measure so it doesn’t add to the federal deficit, setting up a potential election-year showdown over budget policy.
House Republicans plan to vote as early as Friday to freeze the interest rates on certain federal student loans at 3.4% for the year that starts July 1. The lawmakers plan to make up the unrealized revenue by tapping money that was directed by the 2010 health-care overhaul to fund investment in illness-detection procedures. Without congressional action, the rate on the loans would double on July 1 to the 6.8% level that applies to the most commonly used type of federal student loan. Loans issued before July 1wouldn’t be affected.