For students with loans to pay off, times have never been better. And they may never be this good again.

Rates on federal student loans have fallen to around 3 percent — a 35-year low. Even better, students can lock in those rates, potentially saving thousands of dollars by ensuring their payments won’t increase even if interest rates do.

But a proposal in Congress could shut down the party. The measure would end the fixed-rate option, making all federal student loans issued after July 2006 subject to variable rates. Repayments would then rise and fall each year in sync with interest rates.

The change — just one part of the reauthorization of the mammoth Higher Education Act now wending through Congress — is intended to shift federal subsidies away from those who already have a degree, freeing up money for programs targeted at students who may be struggling to get to college at all.

The proposed change has split both Democrats and Republicans on the House Education and Workforce Committee. Chairman John Boehner, R-Ohio, and Rep. Rob Andrews, D-N.J., have introduced different versions, but others members oppose the proposal. Presumed Democratic presidential nominee Sen. John Kerry also has criticized it, saying variable rates would harm students and enrich lenders.

Education groups also divided. The United States Student Assn. opposes the idea, but supporters include, along with lenders, the National Association of Student Financial Aid Administrators and College Parents of America.

“This is the most visible and contentious issue in the reauthorization,” said Terry Hartle, senior vice president of the American Council on Education.

His group supports variable rates but wants the rate capped at 6.8 percent. The current proposal would keep the existing cap of 8.25 percent.

The debate comes amid growing anxiety about college costs and student debt. Figures released last week by the Department of Education show the share of full-time college students who borrowed to pay for college rose from 30 percent in 1990 to 45 percent in 2000.