Federal student-loan financing is expected to drop by $12.7 billion over the next five years, under a provision in the massive fiscal 2006 budget bill that President Bush signed on Feb. 8.
The Deficit Reduction Act of 2006, which the House approved on a 216-214 vote Feb. 2, would save the money by setting a standard interest rate for student loans at 6.8 percent, even if commercial rates are lower.
The measure, which the Senate approved 52-47 in December, also scales back a 1998 law denying federal financial aid to applicants who indicated they had been convicted of a drug offense.
That ban will no longer cover juvenile offenses, and offenders can regain eligibility by completing certain drug-treatment programs.
In an unexpected twist, a typographical error in the text of the bill passed by the House reportedly requires a technical correction, and speculation abounds that congressional Democrats may try to use the correction to force another vote on the act.