What is the rule about only one lender? Well, the single lender rule says that if you're a student and you want a loan, your request goes to the Department of Education, which decides who will be your lender. After you do this, you don't have many choices. Due to the "single lender rule," students are often stuck with only one lender. This rule has a lot of bad things about it.
At first glance, having only one lender hold all of your student loans may seem like a good idea, but there's more to the "single lender rule" than meets the eye. First of all, the single lender rule says that you have to consolidate all your student loans with the same lender. This could cost you a lot of extra money because you don't have any other options for better interest rates or lower fees. Second, the single lender rule lets your lender give you bad service and rates that aren't competitive. The single lender rule says that competition can't hurt the lender. That means that, according to the single lender rule, you can't change your lender or look elsewhere for better service.
You may say 'Ok. But I'm not going to choose a bad lender!' Well, the single lender rule says that it's not up to you to decide. The Department of Education makes this choice, which is even more unfair than the single lender rule. So, basically, the single lender rule means that you can't choose from the better rates and better customer service that many student consolidation companies offer. Some of these companies might have better options, like "borrower benefits" that can lower your overall interest rate. On top of all the other problems, the single lender rule makes it impossible to re-group student loans.
The good news is that there is a lot of work going on to get rid of the single lender rule. By getting rid of the rule about only one lender, students would have more options to choose from. The single lender rule says that students shouldn't be able to choose their lender. Instead, they should be stuck with one lender who doesn't meet their needs and expectations. As a student, you can write or send an email to your local senators to ask that the single lender rule be changed or even gotten rid of.
Instead of the single lender rule, students could make a list of single lenders from which they could choose their lender. But even if there was only one lender on the list, the person would still have to be careful about who he chose. What the student should care about when looking at the options on the single lender list is how the lenders do business. Since your lender will pay off all of your debts, you should make sure that the lender you choose from your list of single lenders is a serious person or company that pays your creditors on time. One thing you should look for among the lenders on your list of single lenders is complaints about fraud or bad business practises, if they had any. You should also look at the different rates and interest of each lender on your list of single lenders.
No matter how many ways there might be to fix the problems students are facing now, they are stuck with the single lender rule and its many problems for now. Even though the Senate has been put under pressure to get rid of the single lender rule, nothing has been set in stone yet. Maybe this will change in the future, and students will be able to think about making a single lender list before choosing the lender who will handle their loans.
