2008 Woodie Awards
Dear Student Loan Borrower:
Edward M. Kennedy
Issue date: 3/10/05 Section: Op-Ed
- Page 1 of 1
President Bush's budget, if enacted, will eliminate opportunities available under current law to consolidate some or all of your student loans at a fixed interest rate. If you have not already consolidated your student loans, I strongly urge you to consider doing so quickly, given the President's proposal and today's low fixed interest rates.
The consolidated student loan option was made available by Congress to help students who leave school with multiple student loans and who must make multiple payments at different variable interest rates. The consolidated student loan benefit enables borrowers to pay off their variable rate loans with the proceeds of a new, single, and fixed interest rate loan.
Under a consolidated student loan, instead of making multiple payments, a borrower has to make only one payment a month. Moreover, a consolidated loan locks in today's low interest rate for the life of the debt. The combination of these two benefits makes it easier for borrowers to keep loan payments on track and avoid costly delinquency or default charges.
For new borrowers consolidating their student loans today, the relevant fixed interest rate is a record low 3.38%. If you are considering consolidation and complete your application within 6 months of graduation, you are entitled to an additional reduction in the Direct Loan Consolidation Program that brings your interest rate down to 2.88%. Many Federal Family Education Loan lenders offer the same generous interest rate as the Direct Loan Program.
I oppose President Bush's proposal to end the consolidated student loan benefit as we know it. In fact, the consolidated loan benefit should be expanded. Current law does not allow borrowers to "reconsolidate" or more accurately refinance a consolidated student loan. It should. Borrowers who consolidated their loans at higher interest rates in the past deserve to be able to refinance their loans at today's record low fixed interest rates. At a time when lenders are making record profits off of the government college loan program, reducing student loan benefits is an unfair way to reduce the federal budget deficit.
Even if President Bush's proposal is rejected, now is still the best time to consolidate your student loan if you have not done so already. According to the Congressional Budget Office, federal student loan interest rates are projected to rise this July and each July thereafter in the near future. According to the Congressional Research Service, the fixed interest rate benefit today is worth over $5,000 for the typical, new student borrower over the life of his or her college debt.
Please take a few minutes to see if student loan consolidation is an option for you. You can call 1-800-557-7392 or TDD 1-800-557-7395 or go to http://www.ed.gov/offices/OSFAP/DirectLoan/consolid2.html to obtain specific information about your potential savings. I urge you to take full advantage of this important opportunity.
Sincerely,
Edward M. Kennedy
U.S. Senator (D-MA)
The consolidated student loan option was made available by Congress to help students who leave school with multiple student loans and who must make multiple payments at different variable interest rates. The consolidated student loan benefit enables borrowers to pay off their variable rate loans with the proceeds of a new, single, and fixed interest rate loan.
Under a consolidated student loan, instead of making multiple payments, a borrower has to make only one payment a month. Moreover, a consolidated loan locks in today's low interest rate for the life of the debt. The combination of these two benefits makes it easier for borrowers to keep loan payments on track and avoid costly delinquency or default charges.
For new borrowers consolidating their student loans today, the relevant fixed interest rate is a record low 3.38%. If you are considering consolidation and complete your application within 6 months of graduation, you are entitled to an additional reduction in the Direct Loan Consolidation Program that brings your interest rate down to 2.88%. Many Federal Family Education Loan lenders offer the same generous interest rate as the Direct Loan Program.
I oppose President Bush's proposal to end the consolidated student loan benefit as we know it. In fact, the consolidated loan benefit should be expanded. Current law does not allow borrowers to "reconsolidate" or more accurately refinance a consolidated student loan. It should. Borrowers who consolidated their loans at higher interest rates in the past deserve to be able to refinance their loans at today's record low fixed interest rates. At a time when lenders are making record profits off of the government college loan program, reducing student loan benefits is an unfair way to reduce the federal budget deficit.
Even if President Bush's proposal is rejected, now is still the best time to consolidate your student loan if you have not done so already. According to the Congressional Budget Office, federal student loan interest rates are projected to rise this July and each July thereafter in the near future. According to the Congressional Research Service, the fixed interest rate benefit today is worth over $5,000 for the typical, new student borrower over the life of his or her college debt.
Please take a few minutes to see if student loan consolidation is an option for you. You can call 1-800-557-7392 or TDD 1-800-557-7395 or go to http://www.ed.gov/offices/OSFAP/DirectLoan/consolid2.html
Sincerely,
Edward M. Kennedy
U.S. Senator (D-MA)