McKeon Hails House Passage of Key

Student Loan Borrower Benefit

Repeal of ‘Single-Holder Rule’ Included in Emergency Appropriations Measure

WASHINGTON, D.C. – U.S. House Education & the Workforce Committee Chairman Howard P. “Buck” McKeon (R-CA) today hailed the inclusion of a long-awaited student loan borrower benefit in the emergency supplemental appropriations conference report (H.R. 4939), which was approved by the House.  A key provision in the legislation repeals a federal rule that limits consumers’ ability to shop for the best deal on student consolidation loans.  The measure now heads to the Senate, which is expected to send it to President Bush for his signature.

Current law requires borrowers who have all of their student loans held by a single lender to consolidate with that lender, even if they could obtain better terms and service elsewhere.  This restriction, often known as the "single-holder rule," is repealed under the appropriations measure.

“Repealing the single holder rule is a key borrower benefit we’ve been working toward for years,” said McKeon.  “I’m pleased we are finally able to get this reform to President Bush so we can end this consumer-unfriendly practice for good.”

As a result of the repeal, borrowers will now have the ability to shop around with other lenders for the best terms and services, while ensuring the original holder of their loans can and must compete to retain the loan.  The repeal of the single-holder rule was included in budget legislation adopted earlier this year but ultimately was removed before a final vote for procedural reasons.  The repeal also was included in the College Access & Opportunity Act (H.R. 609), which the House passed in March.  Because the Senate has yet to act on that legislation, McKeon worked with House appropriators to include the repeal in the spending measure passed today – ensuring a vote in the Senate and, ultimately, an opportunity for President Bush to sign it into law.

“This is repeal is logical yet long overdue,” McKeon concluded.  “I still hold out hope that the Senate will act on the other key student reforms passed by the House earlier this year, but it goes without saying that ending the single-holder rule is a step in the right direction.”

For more information on House Republican efforts to expand college access for low- and middle-income students, visit the Education & the Workforce Committee website at http://edworkforce.house.gov/issues/109th/education/hea/hea.htm. 

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