Washington — Taking further action to shore up the student-loan market, the Education Department announced today that it would temporarily pay lenders a higher subsidy rate on loans issued through the guaranteed-student-loan program since 2000.

Under existing law, the subsidy rate is indexed to the rate at which banks lend commercial paper, which is short-term obligations issued by companies. Under the department’s change, the lender yield for certain days in the fourth quarter of 2008 would be set at the rate at which the government has agreed to purchase commercial paper through its bailout plan.

In a letter explaining its latest move, the department said the change was necessary because there were days during the fourth quarter in which the credit freeze made it impossible for commercial paper to be sold. For those days, the department would use an index pegged to the bailout terms.

The department’s move came a day after the U.S. House of Representatives released an economic-stimulus bill that would replace commercial paper in the subsidy formula with an international benchmark, the London Interbank Offered Rate. That rate, known as Libor, is based on the interest rates at which banks borrow unsecured money from one another on the London money market, and is roughly comparable to the federal funds rate. The substitution would result in a more generous subsidy than the department’s fix.

The department’s announcement rendered the proposed legislative change irrelevant because the department’s shift would take place immediately. The stimulus bill is not expected to be final until February.

Lenders have lobbied for such a formula change, arguing that federal efforts to thaw the frozen credit markets have artificially reduced the commercial-paper rate, cutting into lenders’ profits.

But even with the change, a recent drop in interest rates will leave lenders with a “negative subsidy” rate for the fourth quarter. That means the lenders will have to start making interest payments to the government for each loan they issue because the 6.8-percent fixed rate that students pay on government-backed loans is greater than prevailing market rates. —Kelly Field