Student Loan Xpress Commends Repeal of 'Single Holder Rule'

National lender Student Loan Xpress (SLX), a CIT company, today welcomed the United States Senate’s passage of the Emergency Supplemental Appropriations Act of 2006 that included a provision which provides immediate relief to student loan borrowers.

The final version of the Emergency Supplemental Appropriations Act of 2006 included a critical repeal of the existing “Single Holder Rule.” This repeal means that student loan borrowers, who currently face rising tuition costs and one of the largest rate increases in the history of the federally guaranteed student loan program, will now have the option and flexibility to refinance their student loans through a variety of student lenders and will no longer be tied to their original lender. The United States House of Representatives previously approved the legislation. The bill now goes before President George W. Bush who is expected to sign the bill into law within the next 10 days.

“Student Loan Xpress applauds Congress for answering the call of students and their families,” said Michael H. Shaut, Chief Executive Officer of Student Loan Xpress. “This repeal creates a competitive marketplace where consumers have choices, and it occurs at a crucial juncture, given the nearly two-point interest rate hike in student loans which takes effect on July 1, 2006. We strongly encourage borrowers to take advantage of this timely repeal, as student-loan interest rates will increase anywhere from 35 to 40 percent for most borrowers after July 1, 2006. Student Loan Xpress looks forward to providing cost-effective and compelling education funding options to even more students and their families.”

Under the existing law, borrowers are limited in their options of refinancing their student loans. When all of their loans are provided by a single lender, borrowers are in effect “handcuffed” to their current lender, unable to take advantage of more attractive offers from other lenders. The provision included in the legislation passed today will repeal the “Single Holder Rule,” offering borrowers relief from this provision that previously limited them in their student loan consolidation options.