WASHINGTON — As a bill to lower private lender subsidies works its way through the legislative process, CUNA is trying to add credit unions as part of the exemptions.
The College Student Relief Act of 2007 (H.R. 5), with more than 200 co-sponsors, would cut the rates for all private lenders to make the loans more affordable for students. When the subsidy rate was set, rates were higher and since they have dropped lenders have "been enjoying a huge windfall," CUNA Vice President of Legislative Affairs Dean Sagar said.
However, on the Senate side, a provision has been added to provide some leeway for nonprofits but it is not exactly what CUNA is hoping for, he explained. "We're trying to make a distinction between the other for-profit lenders and credit unions that are involved," Sagar said. Primarily it is the university-related credit unions that are involved, but credit unions are not heavily into student lending.
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Fortunately in the Senate, he added, "The cuts are not as severe as we thought, certainly in the Senate bill." They had discussed taking private lenders out of student lending altogether, according to Sagar.
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