House approves student loan bill paid for with healthcare funds

WASHINGTON -- Setting the stage for another political showdown, the House narrowly passed a Republican plan Friday that would stop interest rates on student loans from increasing -- by using funds from President Barack Obama's healthcare law.

Democrats want the rates kept low but object to eliminating a fund for public health and prevention programs to finance it.

The GOP approach, they contend, is an attack on women and children who benefit from such programs. The White House vowed to veto the legislation, calling it a "politically motivated proposal," and noted that the health fund provides hundreds of thousands of screenings for breast and cervical cancer.

If Congress can't come to an agreement, loan rates for 7 million college students will double to 6.8 percent July 1. The rate increase would affect new loans.

House Speaker John Boehner, R-Ohio, leveling some of his harshest attacks yet on the White House, said Obama is engineering a "fake fight" to stir up support.

The president in recent days has been traveling to colleges around the country to rally students on keeping rates low.

"It's as simple as this: Republicans are acting to help college students and the president is now getting in the way," said Boehner spokesman Michael Steel.

Democrats say eliminating the health fund is a nonstarter, even though Obama agreed to tap it this year to defray other costs. The Senate Democrats' proposal would close a tax loophole on upper-income earners who organize their small companies as so-called subchapter S corporations.

Individuals making more than $200,000 annually and couples making more than $250,000 in those companies with three employees or fewer would be required to more fully report their corporate profits as taxable income.

"Don't attack and abolish and repeal women's health on the backs of our students," said Rep. George Miller of California, the top Democrat on the education committee.