Parties Bicker over Coming Student Loan Interest Hike

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Democrats and Republicans say they want to prevent the cost of federal loans from doubling for millions of students. But in an intensifying election-year battle, each party wants to pay for it with savings the other side hates.

The interest rate on some loans is set to double on July 1, jumping to 6.8 percent. That jump would affect 7.4 million students in the United States.

In the latest political chess move in the fight, Speaker John Boehner scheduled a House vote for Friday on a GOP bill that would prevent the current 3.4 percent interest rate on subsidized Stafford loans from doubling as scheduled.

The bill's $5.9 billion cost would be paid for with cuts from President Barack Obama's health care overhaul law, which Democrats consider a major accomplishment.

In contrast, a Senate Democratic bill would freeze interest rates but be paid for with fresh payroll taxes on some high-income, privately owned corporations, which Republicans reject.

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