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Republicans to back Obama's student loan idea

By Philip Elliott

Associated Press

Published: Thursday, May 9 2013 12:24 p.m. MDT

President Barack Obama waves prior to boarding Air Force One before departing from Andrews Air Force Base, Md., Thursday, May 9, 2013. Obama is traveling to Austin, Texas. ( AP Photo/Jose Luis Magana)

Associated Press

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WASHINGTON — House Republicans are willing to give President Barack Obama a rare victory on college loans.

The GOP-led House Education and Workforce Committee is backing an idea in Obama's budget proposal to link student loan interest rates to market rates. That's according to Chairman John Kline of Minnesota, who tells The Associated Press he'll add a cap to calm fears of runaway interest rates.

Kline says he's "happy" to let Obama win on this one.

Kline's proposal would consolidate subsidized and unsubsidized undergraduate loans into one program, eliminating taxpayer help on interest payments for needy students.

Without congressional action, interest rates on new federally subsidized student loan rates will double on July 1. That would cost the average student an extra $1,000 each year.

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