A government-based loan program -- state agency secondary marketers in FFELP -- for several years has offered reduced fees or interest rates to borrowers whose banks agreed to sell to them. Due to factors unrelated to the HEA -- disruptions in the bond markets -- some of them like Miss. and Penn. are having trouble raising funds. In fact, the CCRAA gave preferential treatment to the state loan agencies by giving them higher subsidy rates (for future loans) than the banks.
Under current law, borrower origination fees phase out to 0% for the first time in decades. Surely a happy ending: Instead of borrower benefits depending on which state you live in and which school you attend and which agency your bank agrees to sell your loan to, all borrowers have access to a great benefits package. Where are the studies showing that private sector participants were providing borrower benefits, and how many qualified. It is spin. If true, it appeared on a limited basis a few years after DL began as a teaser to get schools and borrowers out of DL. In the 1980s there were more lenders than today, but they charged the maximum fee and rate. What caused the sudden interest in "competition"?
Borrower benefits
A government-based loan program -- state agency secondary marketers in FFELP -- for several years has offered reduced fees or interest rates to borrowers whose banks agreed to sell to them. Due to factors unrelated to the HEA -- disruptions in the bond markets -- some of them like Miss. and Penn. are having trouble raising funds. In fact, the CCRAA gave preferential treatment to the state loan agencies by giving them higher subsidy rates (for future loans) than the banks.
Under current law, borrower origination fees phase out to 0% for the first time in decades. Surely a happy ending: Instead of borrower benefits depending on which state you live in and which school you attend and which agency your bank agrees to sell your loan to, all borrowers have access to a great benefits package. Where are the studies showing that private sector participants were providing borrower benefits, and how many qualified. It is spin. If true, it appeared on a limited basis a few years after DL began as a teaser to get schools and borrowers out of DL. In the 1980s there were more lenders than today, but they charged the maximum fee and rate. What caused the sudden interest in "competition"?