House backs variable rate student loans

WASHINGTON (AP) — The U.S. House says student loans' interest rates should be pegged to the financial markets.

The House on Thursday passed a bill that would tie interest rates to 10-year Treasury bills. The measure would head off a doubling of interest rates on subsidized Stafford student loans come July 1. But the bill faces a veto threat from President Barack Obama.

The bill would offer college students a better rate at first but the rates could climb in coming years.

Democrats say there is no support for the bill in the Senate that they control and are urging lawmakers to extend the current 3.4 percent interest rates for two more years.