Student loans eyed by budgeteers

Republican leaders, acknowledging the need for new borrowing authority, want cuts of at least the same magnitude as any increases as a way to gain control over future spending.

Some of the cuts under review were first advanced by the administration, and others were included in a budget that Republicans passed in the House last month.

Negotiators are also looking to recommendations made by the National Commission on Fiscal Responsibility and Reform, appointed by Obama and headed by Erskine Bowles and former Sen. Alan Simpson.

A separate plan produced by the highly regarded Bipartisan Policy Center also figures in the talks.

Obama’s own budget proposes letting interest begin to accumulate on government loans to graduate students while they are still in school, rather than begin accruing when they finish.

The savings for the government are estimated at $18.1 billion over a decade, money the White House wants to use to expand Pell Grants for education.

Going one step further, Republicans want to allow interest to accrue on loans to undergraduates still in school, at a savings estimated at an additional $46.5 billion over 10 years. Unlike the White House, the GOP would apply all of the savings to deficit reduction.

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