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Money

The www.FedPrimeRate.com Personal Finance Blog and Magazine

Wednesday, May 10, 2006

Is H.R. 609 A Good Idea?

On March 30, 2006, the U.S. House of Representatives passed The College Access & Opportunity Act (H.R. 609): H.R. 609 would repeal the so called "Single Lender Rule" which denies student loan debtors the freedom to shop around for the best possible student loan consolidation deal. Is H.R. 609 good for student loan borrowers? Maybe. But H.R. 609 contains language that has many students, citizens and Members of Congress up in arms against it; check out these links:

http://www.aacrao.org/federal_relations/Vote_No_HR609.pdf

http://as.sdsu.edu/govt/council/pub_notice/notices/Archive/05-06/CB_F05-02.html

http://www.civilrights.org/issues/affirmative/details.cfm?id=41784



H.R. 609 is now being considered by the U.S. Senate. If you think the bill is no good, use the following link to contact your Senator and tell him/her how you feel about it:

http://www.yourcongress.com/MemberSearch.asp


And, because it's only right to present both sides of the story, here's a snippet from a press release that was issued today:

"For online student loan expert Mike O'Brien, CEO of national student loan marketer EDLoan.com, the drawn-out struggle on Capitol Hill over the repeal of the Single Lender Rule has proceeded at an excruciatingly slow pace. But he's primed and ready to lead the charge for student loan borrowers if the repeal passes, now considered a distinct possibility in 2006.

'The outcry against the Single Lender Rule has been going on since I first entered the industry in 2000,' says O'Brien, who launched financialaid.com that year, a student loan marketing organization that became one of the nation's most successful online loan marketers. 'I've had to tell literally thousands of borrowers that I can't help them get lower interest rates or better terms for their student loan--or we've had to personally work with borrowers to consolidate their loans through long, drawn-out processes--all because of this rule. Now that it finally looks like Congress is hearing the call to action, and we're ready to spread the word to borrowers everywhere.'

The hopes of student loan borrowers and entrepreneurial loan organizations like Edloan.com rest on The College Access & Opportunity Act (H.R. 609), passed March 30 by the House of Representatives and currently under consideration by the Senate. As part of its terms, the Act will allow student loan borrowers to 'shop for the best deals' on consolidation loans by eliminating the Single Lender Rule. This rule limits consumers' ability to consolidate with the lender of their choice by requiring consumers who have all of their loans held by a single lender to consolidate with that lender, even if they could obtain better terms and service elsewhere. Borrowers would now have the ability to consider other lenders for the best terms and services, while ensuring the original holder of their loans can and must compete to retain the loan.

If the Single Lender Rule is repealed, EdLoan.com plans an aggressive online promotional and educational campaign to notify borrowers of their new options."


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