Generation Debt

I have just reviewed the bill summary and don't see where it allows for "reconsolidation" of already consolidated loans? Is this concern addressed in the bill?

All I can say is "Wu hoo!!"

This loan is killing me!

T.

As I read this amendment nothings was done to eliminate the one time consolidation rule. 20 USC 1078-3(a)(3)(b)(i)now reads "An individual's status as an eligible borrower under this section and section 455(g)terminates under both sections upon receipt of a consolidation loan.

So basically if you have already consolidated your loans at a high interest rate you are simply out of luck. You are still an ineligible borrower.

I thought the main purpose of this site was to push for changes to the one time consolidation rule, not the freedom for new consolidators to pick the consolidating organization of their choice?

Am I reading the amendment and the press release wrong?

I may have read the press release wrong myself. As I look at the release again, it does look as though it would gets rid of the single lender rule. However, the "reconsolidate" language is there in the press release. I'll try to reach Congressman Wu's office this week to get a copy of the text of the amendment (which I wasn't able to find on Friday), and to confirm exactly what the amendment does.

In the meantime, I still think it's a step forward. If the House is amenable to this change, it may be amenable to further changes. So it's still a good idea to get in touch with your representatives, to find out where they stand on this issue.

It looks like the Republicans killed another helpful bill for hard-working US citizens in order to try and pay for their continual fical mismanagement. What a joke! Any bill that proposes any help to students or student loan holders should be approved by any elected official, whether Democratic or Republican. Pathetic.

I think I know what happened now. If you go to Congressman Wu's site you and go to his press release section, you will see that the 7/22/05 press release has removed any reference to reconsolidation and slightly amended the language so that it clearly refers only to the single lender rule. I suspect that a staffer made a mistake in issuing the 7/14/05 press release, since the markup where the amendment was added took place on 7/14/05. The fact that the press release was revised, and the actual language of the marked up bill make it pretty clear that all of those who previously consolidated are still not eligible borrowers. I am not surprised that the single lender changes passed through fairly easily. However, getting lenders to relinquish loans burdened with high interest rates is another matter. If you talk to Congressman Wu's office I would be curious how close he came to changing the elgible borrower defintion. Thanks.

I checked with Congressman Wu's office and confirmed that the amendment accepted was related only to the single holder rule. I asked about what had happened with about the first part of congressman Wu's bill dealing with the eligible borrower rule and was told that that portion of his bill had not been allowed. I asked if a vote had been taken and was told that the eligible borrower portion of the bill had been voted down by a vote of 17-28. I had been hoping for a closer vote. The assistant said that the bill was not dead and was still out there.

H.R. 609 only includes the provision of Congressman Wu's Student Loan Fairness Act which repeals current law denying graduates with loans from a single lender the right to seek out the lowest cost consolidation loan (The Single Lender Rule). Congressman Wu did offer an amendment to allow reconsolidation for all borrowers during the full committee markup, but the committee voted down the amendment 17 to 28.

Sorry for the confusion. The final release following full committee action last week is pasted below. Congressman Wu will continue to pursue this issue.

WU LEGISLATIVE SUCCESSES BUILD TOWARD LEGACY AS OREGON'S "EDUCATION CONGRESSMAN"

Washington, DC--Congressman David Wu again succeeded in amending H.R. 609, the College Access and Opportunity Act of 2005, to include several pieces of his higher education legislative package announced earlier this year. Congressman Wu's legislative package is designed to provide common sense solutions to the problems facing students pursuing higher education and to support our nation's institutions of higher education.

Congressman Wu's successes are particularly noteworthy in light of severe budget cuts. Earlier this year, Congress passed a Republican budget resolution that instructed the House Committee on Education and Workforce to cut $12.6 billion over the next six years. Subsequently, H.R. 609 represents the single largest cut to the federal student aid program in its forty year history.

"Since my first term in Congress, I have had the opportunity to make higher education more accessible for students and to support our colleges and universities," stated Congressman Wu. "Working on behalf of Oregonians who are in pursuit of higher education in order to make a better future for themselves and for America is very rewarding. I am pleased to serve the country in this capacity."

Congressman Wu's successes over the last two weeks mean:

 more community college students will continue their education at 4-year institutions to earn bachelor degrees;

 a greater number of students from varying disciplines will pursue teaching degrees;

 graduates burdened with loans will save money;

 cash-strapped students will receive their full financial aid checks at the beginning of the term; and

 historically significant campus buildings will be restored and maintained.

Community colleges and four-year institutions across the country will now have access to federal funds to create partnerships to assist community college students in continuing their education at four-year institutions. Congressman Wu based his legislation on a program Portland State University (PSU) created to address the needs of students who pursue their education in non-traditional ways. PSU discovered students would take classes at a community college in the morning, go to work, and then take night classes at PSU, or vice versa. Those students had to deal with two sets of administrations, two sets of paperwork, and two sets of financial aid.

In response, PSU partnered with Portland Community College to decrease this administrative burden. The partnership allows a community college student to register in a dual enrollment program. Enrollees' class credits, financial aid, and administrative paperwork seamlessly transfer between the schools. Such partnerships ultimately encourage more students to continue their education at 4-year institutions to earn bachelor degrees the competitive global economy demands.

Colleges and universities around the country will be able to use federal dollars from teacher recruitment grants to establish dual degree programs. Congressman Wu's dual degree amendment mirrors a new program Oregon State University began to encourage more students to pursue teaching degrees. The program allows students to earn two bachelor's degrees at the same time, one in their chosen field and the other in education. Congressman Wu believes these programs will attract a broader population of teacher candidates and directly address teacher recruitment needs for more secondary science, mathematics and technology teachers.

Just as families have saved money when refinancing their home mortgages, graduates will be able to consolidate their student loans with the lender of their choice, taking advantage of competitive interest rates and loan terms. H.R. 609 includes a core provision of Congressman Wu's Student Loan Fairness Act which repeals current law denying graduates with loans from a single lender the right to seek out the lowest cost consolidation loan.

Additionally, colleges, such as Portland State University, with lending practices deemed to have a low loan default rate will have the flexibility to offer students access to their full loan amount to purchase books, supplies, housing deposits and other educational startup expenses. H.R. 609 also includes Congressman Wu's Paperwork Reduction and Flexibility Act that allows these low default rate colleges and universities the flexibility to disburse the entire amount of a student loan to first time borrowers in a single payment and waive a burdensome 30-day withholding requirement. Currently students often have to finance the first few months of college startup expenses using other lines of credit such as unsecured loans or credit cards that typically have higher interest rates than student loans.

Institutions of higher education will now have access to federal grant funds to restore and maintain historically significant campus buildings. Congressman Wu's amendment clarified existing law that allows institutions to use federal funds to construct, maintain and renovate classrooms for many purposes, including making them more technologically advanced. Many institutions can now invest in older campus buildings, such as PSU's Lincoln Hall, to not only better serve students, but also to salvage an important piece of local and American history.

Congressman Wu also passed an amendment to address the rising cost of college textbooks. He believes one way a college education can be more accessible for all students is to make textbooks more affordable. The amendment lists specific steps textbook publishers, college bookstores, faculty and institutions of higher education should take to make college textbooks more affordable for students.

Congressman Wu's textbook amendment follows a request he made last year for the Government Accountability Office to investigate the rise in the price of textbooks and the business practices of the publishing industry. The report is due to be released early next month. Should the report highlight areas in need of reform, Congressman Wu will continue to pursue legislation.

Still at issue in the bill is the need to increase the maximum amount of the Pell Grant and provide full funding for those grants. Since 1993, the maximum authorized Pell Grant has been $5,800, though the maximum amount funded for Fiscal Year 2005 is only $4,050. While college costs rise every year, H.R. 609 freezes the maximum authorization at $5,800 through 2013. In 1976, the Pell Grant funded up to 72% of the average cost of a public 4-year institution; today, it provides less than 40% of the costs. Congressman Wu intends to keep fighting to increase the funding level, placing college within reach of more families.

BACKGROUND: H.R. 609 amends and reauthorizes higher education programs receiving federal dollars. H.R. 609 was marked up over the last three days in the House Committee on Education and Workforce and follows last week's mark up in the Subcommittee on 21st Century Competitiveness. Committee action on H.R. 609 is now complete and the legislation is ready for consideration by the full House of Representatives.

Congressman Wu has served on the House Committee on Education and Workforce since his first election to Congress in 1998.

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