January 18, 2002

Subsidies for Interest Rates on Student Loans

To the Editor:

The Chronicle continues to mischaracterize the concept of student-interest subsidies in the Federal Family Education Loan Program. The article titled "Lenders and Student Groups Finally Agree on a Plan to Change Interest Rate on Loans" (December 7) notes that in 1998, the interest rate charged to students was reduced by "eight-tenths of a percentage point." The next sentence says, "The lawmakers then created a new federal subsidy for lenders that reimbursed them for

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