Senate Bill Targets Loan Defaults
Washington--The Senate has unanimously approved a bill aimed at curbing student-loan defaults.
But the measure faces an uncertain reaction in the House, where key lawmakers are waiting to see the Education Department's new regulations on the issue.
The Senate bill, sponsored by Claiborne Pell, Democrat of Rhode Island, is almost identical to one that passed in the Senate last year. That proposal died, however, when House leaders decided to postpone consideration until the department acted.
The Senate bill would require any lender, school, or guarantee agency with a default rate of 25 percent or more to develop a default-management plan. If a school's rate did not fall below 25 percent within three years, the state guarantee agency could recommend that it be suspended or terminated from the program.
The Senate bill "won't change our strategy at all," said Rick Jerue, staff director of the House Subcommittee on Postsecondary Education. "We are still waiting for the Administration's regulations."
Mahlon Anderson, an Education Department spokesman, said last week that the rules would be issued in late spring or early summer.--mw