News from the
Committee on Education and the Workforce
John Boehner, Chairman

FOR IMMEDIATE RELEASE
May 12, 2004

 CONTACTS: Alexa Marrero or 
Dave Schnittger 
Telephone: (202) 225-4527

New CRS Report Shows Variable Rate Consolidation Loans Are Less Expensive for Borrowers than Fixed Rate Loans

          WASHINGTON, D.C. – A new analysis from the independent Congressional Research Service (CRS) shows variable rate consolidation loans tend to cost less for borrowers. This new information confirms that reforms proposed by Republicans and some rank-and-file Democrats in Congress to make all new consolidation loans available under a variable interest rate will likely be less expensive for borrowers.

          The CRS analysis shows that in 13 of the last 18 years – since 1986, the first year of the consolidation loan program – borrowers would actually have been better off had their consolidation loans been available under a variable interest rate like that proposed in the College Access & Opportunity Act, a bill introduced to expand college access for low and middle-income students. If borrowers had extended repayment of their consolidation loans to 20 years, the analysis shows borrowers would have paid less interest in 14 of the last 18 years.

          “No one can accurately predict what future interest rates will be. What we can do is examine past history,” said Education & the Workforce Committee Chairman John Boehner (R-OH). Boehner introduced the College Access & Opportunity Act with 21st Century Competitiveness Subcommittee Chairman Howard P. “Buck” McKeon last week.

          “And this new information from CRS does just that. This analysis definitively shows that borrowers would be better off under the variable rate consolidation loan structure we are proposing,” continued Boehner.

          A copy of the CRS report is available by clicking here.