Bush will work with Congress on student loans

WASHINGTON Wed Jul 18, 2007 6:19pm EDT

Graduates of Columbia University are seen during this year's commencement ceremony in New York on May 18, 2005. The Bush administration said on Wednesday it cannot support a Senate bill that would cut subsidies to college student loan firms and boost student grants, but said it will work with Congress on the issue. REUTERS/Chip East

Graduates of Columbia University are seen during this year's commencement ceremony in New York on May 18, 2005. The Bush administration said on Wednesday it cannot support a Senate bill that would cut subsidies to college student loan firms and boost student grants, but said it will work with Congress on the issue.

Credit: Reuters/Chip East

WASHINGTON (Reuters) - The Bush administration said on Wednesday it cannot support a U.S. Senate bill to cut college student lender subsidies by $18 billion and boost student grants, but it will work with Congress on the issue.

As the Senate neared a vote on its version of legislation passed in the House of Representatives, the White House said it "cannot support Senate passage of (the bill) in its current form because of serious concerns with some provisions."

The House last week passed a bill that would cut subsidies to lenders -- such as Sallie Mae, Citigroup and Bank of America -- by $19 billion and boost grants.

The White House threatened to veto the House bill, saying that it does not direct enough additional federal funding toward grants that college students do not have to repay.

The Senate bill proposes subsidy cuts more closely aligned with cuts already proposed by President George W. Bush.

The Senate debated its bill on Wednesday. Further debate was expected on Thursday, followed by a possible vote.

Signaling likely negotiations ahead, a White House statement said: "The administration supports reducing excess subsidies in the student loan programs and increasing aid to the neediest students ... The administration looks forward to continuing to work with Congress to resolve these issues."

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