Rob Andrews: “there is an issue here as to the interest rate that students pay when they consolidate their loans, when they…”

“there is an issue here as to the interest rate that students pay when they consolidate their loans, when they consolidate their direct loans in this case. The question is whether or not the students should pay a blended rate, which is to say the rate of all of the loans that he or she is consolidating, averaged and blended in as a weighted average, or whether the students should pay the interest rate paid on newly issued direct loans. I believe that the students should pay the interest rate on newly issued direct loans. I do not believe there is a significant cost consideration here. I think that this is effectively a benefit to students in this way. If interest rates in the long term continue to moderate or even drop, as we have been fortunate to see in the last 3 or 4 years, I think students should get the benefit of that. I think if rates dropped, then students who consolidate their loan should get the same kind of benefit that homeowners get when they refinance their home mortgage. I understand that there are some issues of parity between the FFEL Program and the direct loan program. I frankly would like to see those issues resolved by giving persons who consolidate an FFEL loan the same low rate that students who consolidate direct loans get. I think this parity matter should be resolved in favor of the students rather than the lenders or the government. Having said that, I understand there are issues respecting the pay-as-you-go rules here.…”