Obama threatens to veto Republican student loan plan

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By Elvina Nawaguna
(Reuters) – The White House threatened on Wednesday to veto a Republican bill to switch federal student loan interest rates to a market-based system, arguing the plan would create more uncertainty for students and families.
Under the legislation introduced by Republican Representatives John Kline of Minnesota and Virginia Foxx of North Carolina, subsidized and unsubsidized Stafford loans would be recalculated every year and pegged to 10-year Treasury notes, plus 2.5 percentage points.
Currently, interest rates on those loans are set by the government. Without congressional action, the interest rates are set to double on July 1 to 6.8 percent from 3.4 percent for millions of subsidized Stafford loans.
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