The Republican-controlled House on Wednesday overwhelmingly approved a bipartisan bill to cut the cost of borrowing for federal student loans, sending the measure to President Obama for his signature.
The bill, which had easily passed the Democratic-controlled Senate last week, would retroactively cut higher rates which on July 1 had jumped to at least 6.8 percent.
The bill would let undergraduates borrow through the federal government's Stafford loan program at a 3.9 percent interest rate for this school year. Graduate students could borrow at 5.4 percent, and the parents of students could borrow at 6.4 percent.
President Obama, who has encouraged Congress to cut the rates, is expected to sign the bill.
But the compromise, which ties student loan interest rates to the cost of borrowing by the government, raises the possibility of higher rates as the economy picks up, The Associated Press reported:
"The legislation links student loan interest rates to the financial markets, offering lower rates for most students now but higher ones down the line if the economy improves as expected. Even as they were preparing to pass the bill, many lawmakers were already talking about a broader overhaul of the nation's colleges to curb fast-climbing costs."
Wednesday's House vote was 392-31. The measure had passed the Senate by an 81-8 vote.