Chairman Miller: Federal College Loan Programs Meant to Benefit Students & Parents, Not Lenders
Miller Blasts Republicans for Defending Wasteful Taxpayer Subsidies to Student Loan Industry

Thursday, March 29, 2007

WASHINGTON, DC -- U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee, said today that reconciliation instructions included in the budget resolution approved by the House today will enable the Education and Labor Committee to improve the efficiency and effectiveness of the federal student loan programs.

"Every year, the federal government is wasting billions of taxpayer dollars on excessive subsidies to student lenders. This is money that can and should be used to help families pay for college," said Miller. "At a time of high and rising college costs, it is outrageous that some members of Congress would defend spending billions of taxpayer dollars to pad the profits of big banks instead of making it easier for parents and students to finance a college education. They should start focusing on what's right for students and parents."

In 2006, Republican leaders used budget reconciliation to cut a record $12 billion out of the federal student aid programs. Among other things, these cuts actually raised the interest rates that parents must pay on college loans for their children.

"Last year, the Republican-led Congress cut $12 billion out of the federal student aid programs and then used that money to finance tax cuts for the wealthiest one percent of Americans," said Miller. "Democrats have different priorities. We are going to cut the excessive subsidies out of the student loan programs and then use those dollars for their rightful purpose - helping students and families. And we are going to do it while still producing a small positive benefit for deficit reduction of $75 million. It is well past time to end the waste and abuse in the student loan programs."

Even President George W. Bush's proposed budget for the 2008 fiscal year recommends substantial cuts in excessive subsidies paid to student lending companies. Earlier this year, the House approved legislation to cut interest rates on student loans in half.

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