President Clinton is expected to sign the student loan bill by next week.

The Senate passed a compromise version of higher-education spending legislation on a 96-to-0 vote Tuesday, following a voice vote in the House in favor of the same package late Monday. The bill features a 50-basis- point subsidy for lenders that would cushion the blow of a sharp reduction in interest rates on student loans that took effect July 1. Banking industry officials have said they are generally pleased with the final version.

If the President is unable to sign the bill into law by Thursday, when a temporary subsidy approved in the spring expires, the federal government is expected to issue interim guidelines that mimic the legislation. The Senate passed a compromise version of higher-education spending legislation on a 96-to-0 vote Tuesday, following a voice vote in the House in favor of the same package late Monday. The bill features a 50-basis-point subsidy for lenders that would cushion the blow of a sharp reduction in interest rates on student loans that took effect July 1. Banking industry officials have said they are generally pleased with the final version.

The legislation-which is estimated to cost more than $2 billion over the next decade-is being paid for by a combination of new fees, spending cuts, and revisions to bankruptcy law. About a quarter of the cost will be covered by raising the fees that lenders pay the Government National Mortgage Association, as well as preventing borrowers from canceling their student loan debts in bankruptcy court unless they can show a financial hardship.

Starting Oct. 1, 2004, Ginnie Mae will have to charge mortgage lenders a 9-basis-point fee when they securitize FHA- and other government-backed loans for single-family homes, up from the current charge of 6 basis points. The fees are used to protect purchasers of mortgage-backed securities from lost income if the underlying loans default. "We are very much opposed to that," said George S. Anderson, executive vice president of Ginnie Mae. "Most likely this will be reflected as a higher down payment requirement" of about $300 extra on an average mortgage.

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