A massive effort is underway to cut the ballooning federal budget deficit, but a casualty of those budget cuts will be the traditionally-low student loan rates.

The bill passed the House of Representatives 216-214, Feb. 1, almost exclusively along party lines. The bill aims to decrease the federal debt by $39 billion.

But included in budget cuts are federal student aid subsidies. $12.7 billion will be cut from the subsidies for underprivileged college students.

The legislation already passed the Senate by a one-vote margin, with Vice President Dick Cheney casting the tie-breaking vote in favor of the bill.

With the new legislation, students will also face an increase in student loan interest rates. The current interest rates for student loans will increase from 5.3 percent to 6.8 percent on July 1.

Democrats say the bill punishes college students and causes undue financial pressure for students as they try to find jobs, but Republicans counter that budget cuts come mostly in lender subsidies.

The bill is the first attempt by Congress in eight years at scaling back the growing budget deficit, which some economists say could top $1.3 trillion by 2010. Critics of the legislation say the $39 billion cuts are worthless since the government is pushing for $70 billion tax cuts in President George W. Bush’s budget proposal. Some also criticize the bill’s scaling back of Medicare benefits.

Rep. John Tanner, D-Tenn., voted against the cuts.

“I strongly believe we should cut wasteful government spending,” Tanner said. “This budget bill, however, cuts programs impacting those who can least afford it. The federal government should encourage students to get post-secondary degrees, not make it more difficult.”

However, Rep. Zach Wamp, R-Tenn., who voted for the measure, said the bill actually trims down inefficiencies in the current loan structure.

Wamp said the Deficit Reduction Act eliminates loopholes that could mean higher rates for students, gives borrowers a choice between variable or fixed rate loans and increases loan limits. Wamp also pointed out that the bill allows for additional subsidies for students studying math, science or foreign languages.

President George W. Bush supports the Republican-backed bill and is expected to sign it into law.