September 21, 2001

Subsidies for Lenders or Subsidies for Borrowers

To the Editor:

The Chronicle does a disservice to its readers in its article titled "Key House Republican Pushes to Renew Subsidy for Lenders of Student Loans" (August 17). Most important, the article suggests that the difference between the borrower's interest rate and the lender's return on loans is a "subsidy for lenders." In fact, the difference, although paid to the lender, is a borrower subsidy provided by the government, just as the in-school-interest subsidy ... is a subsidy

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