Thomas E. Petri: “my alternative market study mechanism, which is before us, this amendment would significantly advance our understanding…”

“my alternative market study mechanism, which is before us, this amendment would significantly advance our understanding of market-based reforms to the guaranteed student loan program that were begun last year during our consideration of the College Cost Reduction Act. This Congress has demonstrated significant interest in developing some type of comprehensive market-based reform in order to overhaul the guaranteed loan program and make certain that taxpayers' interests are better served. Last year, I had the opportunity to offer an amendment in the Education and Labor Committee to the College Cost Reduction Act to study and pilot a market-based reform, such as an auction, to determine how the Federal Government may better determine lender yields to reduce wasteful spending in the guaranteed loan program. This amendment was adopted in the committee and included in the bipartisan House-passed bill last summer. Well, I was pleased that an auction pilot was included in the final law. There is growing concern among reformers, the lending industry, and the administration that the Senate model which was adopted may have significant implementation and logistical challenges. However, this bill presents us with an opportunity to further study and consider an effective market-based reform proposal.”