Op-Eds

While many are focused on fighting the government takeover of the health care system, a lesser-known bill passed the U.S. House of Representatives last week that paved the way for a government takeover of the student loan industry. 

Recent polls have shown that Americans feel the government is trying to do too many things that should be left to businesses and individuals. 

Concern about too much growth in government has not been this high in over a decade and substantiates what Americans have been saying over the past several months. However, Congressional leadership has not been listening.

Last week, the House passed H.R. 3221, which dramatically expands the federal government by eliminating the private sector-based federal student loan program and spends tens of billions of dollars on a range of new entitlement programs.

Currently, two federal student loan programs exist – the Federal Family Education Loan program (FFEL) and the Federal Direct Lending program.  The fundamental difference between these two programs is the sources of money they use to fund student loans. The FFEL program uses private capital, while Direct Loans are financed through the U.S. Treasury.

In 1993, Congress worked with newly-elected President Bill Clinton to create the Direct Loan program. Democrats at the time argued this “public option” in student lending would merely add a competitive element to the marketplace, the same argument we are now hearing in the health care debate.

H.R. 3221 fully abolishes the private sector-based FFEL program and replaces it entirely with the Direct Loan program — the so-called “government option,” which will now be the only option.

Requiring student loans to flow through a single government channel will dramatically increase our national debt and tie up federal capital.  I offered an alternative to H.R. 3221 which would retain the current lending system, study reform options, put $13 billion toward deficit reduction and help avoid a massive infliction of debt on future generations.

Currently, 4,400 colleges and universities still choose to participate in the FFEL program. If they felt it wasn’t working they would have joined the Direct Loan program by now, but they haven’t. 

I have heard from colleges and universities across my district and they have all shared with me how the FFEL program benefits their students by offering additional services, flexibility, and choice. 

Dr. Gary Ransdell, President of Western Kentucky University in Bowling Green has told me that the end of the FFEL program would, “mean the loss of financial literacy programs, college access programs, default aversion programs, borrowing benefits and other support services.”

Further, Dr. William Huston, President of St. Catharine College, a small, independent private college in Washington County, said the shift “would mean investing staff time and money to change systems and processes at a time where budgets have been cut to the core.” 

I did not come to Washington to serve government, but to serve you.  The bottom line is that students who need federal student loans are not well served by H.R. 3321.  They lose choice and service, while they watch spending and the national debt swell. 

I urge those in the U.S. Senate not to support this legislation and hope we can work toward a bipartisan solution. I know the importance of postsecondary education and as the Ranking Member on the U.S. House Subcommittee on Higher Education, Lifelong Learning, and Competitiveness I will continue to be a consistent voice for America’s students and their families.