SCRA Rate on Student Loans - Mary Beth Guard

<a href="http://adserve.bankersonline.com/cgi-bin/advertpro/blink.fpl?region=2&slot=1" target="_top"><img src="http://adserve.bankersonline.com/cgi-bin/advertpro/bimg.fpl?region=2&slot=1&keyword=NULL" border="0"></a>


Site Map Our Sponsors Home

Compliance Gurus
Operations Gurus
Security Gurus
Marketing Gurus
Technology Gurus
eBanking Gurus

Print Friendly!

Email This Article!

<a href="http://adserve.bankersonline.com/cgi-bin/advertpro/blink.fpl?region=34&slot=1" target="_top"><img src="http://adserve.bankersonline.com/cgi-bin/advertpro/bimg.fpl?region=34&slot=1&keyword=NULL" border="0"></a>

SCRA Rate on Student Loans
by Mary Beth Guard, BOL Guru
Guru BIOS

Question: I realize that, under the old SSCRA, �1078 of title 20 was interpreted to trump the interest rate cap on student loans. The newly enacted SCRA does not make any reference to this. Does this section still trump the interest rate cap?

Answer: I do not believe the former version of the SSCRA explicitly referenced 20 U.S.C. 1078 either. In my view, even though the SCRA does not make a reference to it, 20 U.S.C. 1078 would still have a preemptive effect in that it deals specificially with a particular type of loan (guaranteed student loans) and its language uniequivocally states the intent of Congress that no other statute be able to limit the interest rate on these loans.

It provides, in pertinent part:

(d) Usury laws inapplicable
No provision of any law of the United States (other than this chapter) or of any State (other than a statute applicable principally to such State's student loan insurance program) which limits the rate or amount of interest payable on loans shall apply to a loan -

(1)
which bears interest (exclusive of any premium for insurance) on the unpaid principal balance at a rate not in excess of the rate specified in this part; and

(2)
which is insured

(i)
by the United States under this part, or

(ii)
by a guaranty agency under a program covered by an agreement made pursuant to subsection (b) of this section.

First published on BankersOnline.com 9/20/04

Home | Compliance | Lending | Operations | Security | Marketing | Technology | eBanking

BOL Archives Privacy Policy Important Disclaimer Recommend This Site ! Contact Us

BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.