October 1, 1999

U.S. Rejects Lenders' Bid to Change System for Setting Student-Loan Interest Rates

By STEPHEN BURD

The Clinton Administration and college leaders have dashed the hopes of lenders who had sought their support for changing the way interest rates are set for guaranteed student loans.

The formula for calculating loan interest is currently based on the interest rate of 91-day Treasury bills. For the past two years, however, lenders have pushed Congress to base the formula instead on the index used for commercial paper -- the short-term loans that are made to major

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