Limited impact via Senate deal on student loan rates

RPT-Fitch: Limited impact via Senate deal on student loan rates Jul 12th 2013, 05:41 Fri Jul 12, 2013 8:37am EDT July 12 (Reuters) - (The following statement was released by the rating agency) Wednesday's Senate agreement regarding Federal Student loan rates is a positive development for student loan borrowers. However, Fitch Ratings believes the deal will have a limited impact on the competitive landscape and overall demand for student loans. Fitch expects student borrowers will continue to rely on federal student loans (up to the maximum amount allowed) given their more attractive terms versus private loans, despite a potential move to market-based rates. Therefore, we would not expect the Senate's proposal to have a material impact on the overall demand for private student loans. In fact, total private student originations grew roughly 3% in the 2011-12 academic year, despite even lower interest rates on federal student loans and more stringent underwriting standards at private lenders.