WASHINGTON – The House of Representatives passed a bill Friday to keep the interest rate on federally subsidized student loans at 3.4 percent for another year, but President Obama threatened to veto the measure because it would cover the $6 billion cost of the extension by cutting money in the health care reform law for preventive care and public health. Obama has seized the student loan issue as the campaign for the general election begins in earnest, touring college campuses and calling on Congress to act to stop the interest rate from doubling to 6.8 percent in July.
Democrats in the House and Senate proposed paying for the extension through either changing tax laws that allow owners of some corporations to avoid payroll taxes, or through cuts to oil subsidies. Republicans previously said they wanted a long-term solution rather than a short-term extension, and passed a budget for fiscal year 2013 that allowed the interest rate to increase.
Friday's bill passed 215-195.