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.