Vote to pass a bill that lowers interest rates on student loans under the Federal Family Education Loan (FFEL) and Direct Loan (DL) programs, and to make other adjustments.
Reduces the interest rate for FFEL and DL loans from 6.8 percent to 3.4 percent by July of 2011 (Sec. 2).
Insures 95 percent of the unpaid principal of loans under the FFEL program, down from 97 percent (Sec. 3).
Reduces the percentage of defaulted FFEL loan collections (currently 24 percent) each year until the rate is equal to the average rate paid to collection agencies that have contracts with the Secretary of Education (Sec. 4).
Eliminates exceptional performer status for FFEL lenders (Sec. 5).
Reduces lender special allowance payments to FFEL lenders (Sec. 6).
Exempts small lenders from the reduction in FFEL lender special allowance payments (Sec. 6).
Increases loan fees for FFEL lenders from 0.5 percent to 1.0 percent of the principal amount of the loan for loans made on or after July 1, 2007 (Sec. 7).
Increases the rebate fee charged to holders of FFEL consolidated loans to 1.3 percent of the principal plus accrued unpaid interest on such loans, starting July 2007, provided that at least 90 percent of the holder's total principal and accrued unpaid interest outstanding are from FFEL consolidated loans (Sec. 8).