The Senate overwhelmingly approved a wide-ranging overhaul of student loan programs early today that would pay for more than $17 billion in grants and other student aid by slashing subsidies to lending companies.
Democrats and student advocates said the legislation, which passed in a 78 to 18 vote, would help millions of Americans pay for college in a time of steady and often steep tuition increases...
The measure would cut subsidies to lenders by about $18 billion over five years and boost student aid by $17.4 billion during that period, with the rest of the savings used to reduce the federal budget deficit. The biggest aid increase would raise the maximum annual Pell grant, the nation's main aid program for low-income students, from $4,300 to $5,400 a year by 2012.
The bill now heads to a conference to reconcile differences with a version the House passed last week that would cut the interest rate on some federal loans in half. The White House has threatened to veto the House measure over this provision, so the final version will likely be closest to this one the Senate passed.