House Democrats pushed through legislation yesterday that would boost government-subsidized student loans and other college financial aid by $18 billion over the next five years, despite strong opposition from Republican lawmakers and a White House veto threat.

The legislation, passed in a 273 to 149 vote, would cut interest rates on federally backed student loans in half and increase Pell grants for low-income students. It would pay for the measures by slashing subsidies to lending companies by about $19 billion over five years and use about $1 billion of remaining savings to reduce the federal deficit...

Lending companies said the subsidy cuts would drive many of them out of business and prevent them from passing benefits on to students...

But Michael Dannenberg, director of the education policy program at the New America Foundation and a former Democratic aide on the Hill, said loan companies would remain profitable.

"I think this is a case of the boy who cried wolf," he said. "The truth is that the student loan industry is one of the most lucrative industries in America..."

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