Don't Forget About Consolidation

In all of the talk about student loan program cuts, says this Albany Times-Union editorial, don't forget that the ability to consolidate loans --refinance at a lower interest rate--is also at stake:

But when it comes to a double whammy, students and former students who are paying off their loans are in a special class. The House is said to favor making permanent a provision in current law that prohibits borrowers from renegotiating interest rates more than once in the lifetime of a loan. That contrasts with the flurry of refinancing whenever mortgage interest rates decline.

Back when Sallie Mae, a major education finance company, was a quasi-public agency, this provision made sense. But Sallie Mae is now in the private marketplace and, by some estimates, is enjoying profits of some $1 billion a year. At the same time, the government shields lenders from bad student loans by denying borrowers the right to write them off by declaring bankruptcy.