The Chronicle of Higher Education is reporting on a bankers warning to Congress over the proposed changes to the federal student loan program.

Bankers’ Group Warns That Cuts In Federal Payments To Lenders Could Hurt Student Borrowers (The Chronicle of Higher Education)

“A group of bankers warned lawmakers on Tuesday that a plan by Democrats to slash the interest rate on federal student loans could ultimately come back to harm student-loan borrowers. Democrats may call on Congress to reduce the profit margin that the government guarantees lenders on federal student loans; impose new fees on banks that offer consolidation loans; and make loan providers assume a higher share of the risk that students might default on their loans. In a written statement released on Tuesday night, the Consumer Bankers Association said that if Congress made those changes, ‘the ability of lenders to invest in technology, enhance customer service, and offer benefits to borrowers’ would be put at risk.”

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