WASHINGTON - Congress approved legislation Friday that would change the way the federal government calculates subsidies for student loans.

Led by Sallie Mae, the banking industry successfully lobbied lawmakers to tie these federal payments to interest rates on commercial paper instead of Treasury bill rates. The Education and Treasury departments opposed the provision, arguing it would yield lenders a windfall of as much as $1.7 billion in increased government payments and lower hedging costs over roughly a decade.

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