Seeking to preserve a profitable niche, industry officials are asking lawmakers to repeal a law that could force banks out of the student loan business.

As of July 1, banks will have to peg interest rates on newly originated student loans to 10-year Treasury bonds instead of 3-month notes. The change is expected to cost the industry more than $260 million a year, increase the amount of interest rate risk lenders must bear, and eliminate the market for student loan securities.

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