[Congressional Record Volume 149, Number 153 (Tuesday, October 28, 2003)]
[Extensions of Remarks]
[Page E2143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE FEDERAL EMPLOYEE STUDENT LOAN ASSISTANCE ACT

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                         HON. VERNON J. EHLERS

                              of michigan

                    in the house of representatives

                       Tuesday, October 28, 2003

  Mr. EHLERS. Mr. Speaker, this legislation ensures the federal 
government's deep commitment to a highly-trained and diverse workforce. 
But we should go even further. In order to best maximize federal 
government resources, we should consider allowing competition within 
other aspects of the student loan program, including consolidation 
loans.
  In order to ensure that we instill such competition, we should 
safeguard and improve existing loan consolidation opportunities. The 
1998 reauthorization of the Higher Education Act has allowed Federal 
Family Education Loan (FFEL) student loan borrowers who hold loans from 
more than one underlying lender to select from those lenders when 
consolidating their loans. This change has enabled many recent college 
graduates to refinance their loans at a lower fixed-interest rate. 
However, student loan borrowers who hold loans through a single lender 
must consolidate loans through their current lender. This rule, known 
as the ``Single Holder Rule,'' fosters a situation analogous to 
requiring homeowners to refinance their mortgages only through their 
current mortgage holders. We should consider repealing the single 
holder rule during the reauthorization of the Higher Education Act.
  As we progress through this reauthorization, I am hopeful that we 
will preserve the existing loan consolidation provisions and also 
improve this important program. Allowing competition in loan 
consolidation encourages student loan borrowers to consolidate their 
loans and to further reduce their debt burden by taking advantage of 
historically-low, fixed-interest rates, just as other borrowers are 
able to do every day.

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