Generation Debt

According to the American Association of Collegiate Registrars and Admissions Officers while overall reducing the money allocated to the Department of Education... the Bush White House has taken a swipe at many "ineffective programs" including student loan consolidation.

"Consolidation loans allow students to turn multiple loans from one or more lenders into a single consolidated student loan. In his budget proposal, President Bush advocates elimination of the single holder rule, the fixed interest rate and rules banning reconsolidation. The budget request would replace the current fixed-rate interest formula for Consolidation Loans with the variable rate formula used for students loans and would allow borrowers to reconsolidate previous consolidations. A 1 percent origination fee would be imposed on borrowers that reconsolidate and the current one-time lender fee on all new Consolidation Loans would be increased from 0.5 percent to 1 percent."

This unfortunately does not mean you should start tearing up your student loan payments as the president's budget isn't binding and isn't approved by Congress like a law. It does however, show which direction the White House would like to see the Congress going as they work to renew the Higher Education Act later this year.