November 23, 1994

The End of Interest Subsidies?

Officials fear new Congress will stop paying interest on loans while students are in college

By Jim Zook

Washington, D.C. -- A rhetorical frenzy over cutting the federal budget that has gripped Washington has given new impetus to an old idea: the elimination of interest subsidies for student loans.

The subsidies, which budget analysts project will cost $9.6-billion over the next five years, were the fourth-largest item on a list of proposed cuts that Republicans in the House of Representatives distributed during the fall election campaign. Those cuts are at the heart of the "Contract