(Washington, D.C.) – U.S. Senator Patty Murray (D-WA) issued the following statement today on the Department of Education's decision to allow seven Federal Family Education Lenders (FFEL) to resume billing for "9.5% loans". Several student-lenders have exploited the "9.5% loans" to reap hundreds of millions in overpayments.
"At a time when families are struggling to pay heating bills, let alone afford college, this administration is giving student-lenders a free pass on the backs of the American taxpayer.
"While auditing lenders that used the 9.5% loan program is a good first step, this program is still mired in controversy, and more needs to be done before lenders are allowed to reap the benefits of these inflated loans. To begin with, the Department of Education needs to work to recoup the millions they doled out to several lenders who abused this program.
"It’s time this administration stood with the students and parents struggling to afford college and stood up to student-lenders who have taken advantage of loopholes to line their pockets."
Last November, Senator Murray asked the Department of Education's Inspector General to conduct a careful investigation of the total amount of taxpayer dollars spent on "9.5% loan" overpayments.