Alexander Statement on President’s Signing of Direct Lending Into Law

Posted on March 30, 2010

WASHINGTON – U.S. Senator Lamar Alexander (R-Tenn.), chairman of the Senate Republican Conference, today issued the following statement on the president’s signing into law the elimination of the private student lending system in favor of direct lending through the U.S. Department of Education:

"Nineteen million college students are going to be unhappy when they find out that this latest Washington takeover overcharges them on their student loans to help pay for the new health care law and other government programs. The government will borrow money at 2.8 percent and loan it to students at 6.8 percent, then spend the difference on more government. Any savings should go to the students, not the government.

“And Americans worried about the federal debt will be unhappy to learn that over the next five years, this Washington takeover adds half a trillion dollars to the debt in order to make student loans. Add to this the prospect of students dealing with four federal call centers instead of over 2,000 community and nonprofit lenders to obtain their loans and 31,000 employees kicked out of work who today are helping students apply for loans.

“The Obama Administration's motto is turning out to be: ‘If we can find it in the Yellow Pages, the government ought to try to do it.’”