Cranberry Township, PA - Former Congresswoman Melissa Hart criticizes Altmire and the Democrat Congress for destroying the student loan market.

Last fall the Democrats pushed through the College Cost Reduction and Access Act (H.R. 2669),  that cut the interest rates that private Federal Family Educational Loan Program (FFELP) lenders will be able to charge in the future, as well as the subsidies lenders receive and the default guarantee. This legislation has had an adverse affect on the lenders and many now lose money providing loans.

Last week, the Democrats had to pass additional legislation, The Ensuring Continued Access to Student Loans Act of 2008 (H.R. 5715), in an attempt to correct the problems they created with the college loan subsidy bill, H.R. 2669.

"Congressman Altmire and the House Democrats claim to be protecting access to student loans, but they should call it what it really is - desperately trying to fix a program they broke before the November Elections," said Hart.

"Students looking for loans for the fall right here in Western Pennsylvania are feeling the impact of the "credit crisis" imposed on us by the Democrat Congress.  The Pennsylvania Higher Education Assistance Agency (PHEAA) decided in recent months to temporarily suspend acting as a lender in the FFELP, which greatly limits the number of loans available to students."

Since H.R. 2669 was passed in September, about a third of the country's top 100 student-loan lenders have decided to temporarily suspended new loans or left the business altogether.

Hart added, "This Congress has done nothing to address the real problem, which is tuition rates are continually increasing, making it difficult to afford higher education.  This is just more of the same from Altmire and the Pelosi leadership; throw money at a problem and avoid finding a solution to the real issue at hand."

The rates cuts in H.R. 2669 will cost taxpayers over $7 billion by 2012.  The student loan lender bail out bill, H.R. 5717 is going to cost taxpayers an additional $655 million by 2009 to purchase guaranteed loans.

The Wall Street Journal summarized the issue yesterday by saying:

"Congress mandated a return on student loans that is too low to attract private capital in the current market. So Congress will now use your money to create artificial investor demand. Taxpayers will bear more risk so that Congress can fashion a new business model to replace the one it just destroyed."

Hart stated, "This is a perfect example of what happens when the government interjects itself into the marketplace.  Hopefully, this will wake up a few people in Washington."

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