U.S. Senator Lamar Alexander (R-Tenn.) today made the following statement upon final passage of his amendment to the Senate version of President Obama’s budget, which will preserve choice in student lending for both students and institutions of higher education.
“Packing up this nation’s successful student-lending program and sending it to Washington to be administered there is not what students and universities want,” said Alexander, a former U.S. secretary of education and president of the University of Tennessee. “I am pleased that the Senate chose to preserve choice in student lending, keeping Washington bureaucrats away from controlling yet another huge and expensive program.”
The passage of Alexander’s amendment means that the popular Federal Family Education Loan (FFEL) Program, which the president’s budget proposed to eliminate in favor of government-controlled loans administered under the Federal Direct Loan Program, will remain intact. Currently, the loans most preferred by students come through private lending, with nearly 12 million loans coming through private lenders and only approximately 3 million under the Direct Loan Program (Fiscal Year 2008). In 2008, 4,421 schools (73 percent) used private lenders while 1,613 schools (27 percent) used the Direct Loan program. Alexander noted that schools choose which program to participate in, and that Congress should respect that choice.
“The United States not only has the best colleges and universities in the world, we have almost all of them,” Alexander continued. “And it’s competition and the markets that have helped us get where we are today. We need to make sure that we keep student lending competitive so that students can choose the right program for them.”