Concerns With a Government Takeover of Student Lending:
I have serious concerns with H.R. 3221, the so-called “Student Aid and Fiscal Responsibility Act”, which passed in the House today. This bill would replace the current Federal Family Education Loans (FFEL) program with a government-run lending system using funds directly from the U.S. Treasury.
This government takeover of student lending would nationalize federal student loans and create 10 new federal programs – all despite the fact that the current FFEL program has been a cost-effective program used by American families for 40 years. In fact, roughly 75 percent of higher education schools currently choose the private-sector loan FFEL program over the government-run Direct Lending program.
I am also troubled by the proponents’ claims of “savings” in this legislation, which is vastly overestimated and uses a typical Washington budget gimmick. In fact, the bill dramatically increases spending and would add hundreds of billions in new debt over the next 10 years when we already face a nearly $12 trillion national debt.