January 18, 2007

WASHINGTON -- I am pleased that 124 of my Republican colleagues joined me in cutting $6 billion in excess subsidies to student loan lenders and instead devote the savings to reducing interest rates on student loans.

For many years, I have spoken out against the bloated and unnecessary subsidies that taxpayers pay to lenders to make loans to students. The non-partisan Congressional Budget Office and President Bush's Office of Management and Budget have both reported that the lender-based "Federal Family Education Loan" program costs taxpayers nearly three times as much as the federal "Direct Loan" program to provide students with the same loan.

Yesterday's vote shows that my colleagues are recognizing the tremendous waste in the FFEL program and the need for continued student loan reform. I urge Members of both parties to demonstrate their continued commitment to fiscal responsibility by cosponsoring the bipartisan, bicameral Student Aid Reward (STAR) Act when I reintroduce it next month.

My STAR Act would encourage colleges and universities to voluntarily participate in the more cost-efficient student loan program and retain 3/4 ($10 billion) of savings for increased Pell Grant aid for their students. This innovative legislation could boost Pell Grants by up $800 per student while also devoting over $3 billion of the savings towards deficit reduction - at no further cost to taxpayers.

I also plan to reintroduce my Income-Dependent Education Assistance (IDEA) Act in the 110th Congress to streamline student loan repayment through an improved income-contingent loan repayment with direct IRS collection. This would greatly help graduates manage their student loan debt after leaving college.

I look forward to working with Republicans and Democrats in the 110th Congress to pursue fiscally-responsible student loan policies that help make college more accessible to students and families.