Congressional Democrats touted lower interest rates that kicked in Tuesday on certain federally subsidized student loans, a day after President Bush signed the latest extension of the law governing federal support for higher education.

The lower interest rates were enacted last year as part of a law that made good on one of the Democrats’ “Six for ‘06” agenda items. The measure cut in half, over four years, the interest rate on subsidized student loans for the neediest students, from 6.8 percent to 3.4 percent.

The first step lowered the rate from 6.8 percent to 6 percent, effective Tuesday.

The law also increased the maximum Pell grant award to the neediest students by $1,090 over five years, to $5,400. For the 2008-2009 school year, the maximum is $4,731. Additionally, the law capped loan repayments at 15 percent of discretionary income and created a debt-forgiveness program for many public-sector employees with loans from the Education Department’s direct loan program.

To offset the costs of the new benefits for college students and graduates, Congress cut more than $20 billion from the subsidies paid to private lenders who offer federally backed student loans. Some Republicans and loan industry analysts blamed the cuts — in concert with the freeze-up of global credit markets — for pushing dozens of lenders out of the business. That turmoil culminated in legislation enacted in May that allows the Education Department to buy loans and enter purchase agreements with lenders in order to get them the capital they need to stay in the business.

On Monday President Bush signed the seventh extension this year of the Higher Education Act, the law that governs federal aid to colleges and universities, and the students who attend them. The extension maintains programs under the law through July.

House-Senate negotiators have been working since February to complete a long-term overhaul of the law.