Student Loan Amendment proposed to decrease the interest rate

H.R.5
Title: To amend the Higher Education Act of 1965 to reduce interest rates for student borrowers.
Sponsor: Rep Miller, George [CA-7] (introduced 1/12/2007) Cosponsors (211)
Related Bills: H.RES.65
Latest Major Action: 1/17/2007 Referred to Senate committee. Status: Received in the Senate and Read twice and referred to the Committee on Health, Education, Labor, and Pensions.


SUMMARY AS OF:
1/17/2007--Passed House without amendment. (There is 1 other summary)

(This measure has not been amended since it was introduced. The summary of that version is repeated here.)

College Student Relief Act of 2007 - Amends the Higher Education Act of 1965 to phase-in cuts in the interest rate charged undergraduate student borrowers under the Federal Family Education Loan (FFEL) and Direct Loan (DL) programs, thereby reducing such rate from 6.8% in July 2006 to 3.4% in July 2011.

Limits FFEL lender insurance to 95% of the unpaid balance of such loans. (Currently, 97% of a FFEL issued after June 2006 is federally-insured.)

Provides for graduated reductions in the percentage of defaulted FFEL loan collections a guaranty agency is allowed to retain until, beginning in October 2010, it is equal to the average rate paid to collection agencies that have contracts with the Secretary of Education.

Eliminates exceptional performer status for lenders, servicers, and guaranty agencies, which rewards such entities for high due diligence in FFEL collection.

Reduces special allowance payments made to FFEL lenders to compensate them for the difference between FFEL interest rates and market rates. Exempts small lenders from such reduction.

Increases the loan fee charged FFEL lenders from .5% to 1% of the principal amount of loans disbursed after June 2007. Prohibits its collection from borrowers.

Increases, after June 2007, the rebate fee charged a holder of FFEL consolidated loans, provided that at least 90% of the total principal and accrued unpaid interest outstanding on loans held by such holder are such loans.