A r c h i v e d  I n f o r m a t i o n

FOR RELEASE: November 6, 2000	Contact:          Stephanie Babyak (202) 401-2311 Jane Glickman (202) 401-1307

Statement by U.S. Department of Education on
Lawsuit Filed by Private Lenders and Associations

The Department has worked hard to reduce the cost of college and student loans for students and parents and to reduce student loan defaults. The Department has both reduced student loan fees and offered students interest rate reductions as repayment incentives. The fee reduction and the repayment incentives challenged by the lenders in their lawsuit save students and parents money, are in the best interests of the taxpayer, and help prevent defaults.

This lawsuit is an attempt by special interests - lenders and their associations - to increase their profits by making student loans more expensive for students and their families. The fee reduction and repayment incentives are entirely consistent with the Department's legal authority.

Finally, the timing of this lawsuit speaks for itself. The suit was filed long after the student loan fee reduction was put in place and the announcement of the student loan repayment incentives.