Congress has brokered a truce in the battle over interest rates paid on new government-guaranteed student loans, but a new fight has broken out over borrowers who consolidate their college loans into one credit.

On July 1 a little-noticed provision in a 1993 law kicked in cutting the interest rate students may be charged by 80 basis points. Swayed by lenders who argued that the cut would make student lending unprofitable, Congress agreed to soften the blow by paying lenders a 50-basis-point subsidy.

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