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November 1, 2007

6 Senators Demand Answers on Overpayments to Lenders

Washington — Six U.S. senators, including two presidential candidates, have sent a letter to the Education Department’s inspector general, asking for a “complete accounting” of how much money the department spent on excess subsidies to lenders.

The letter, which was signed by two Democrats who are running for president, Barack Obama of Illinois and Hillary Rodham Clinton of New York, is a response to a recent analysis by The Washington Post that found that lenders may have improperly collected $330-million by manipulating a program that once made them eligible for a 9.5-percent rate of return on student loans.

The letter’s other signatories are Byron L. Dorgan of North Dakota, Edward M. Kennedy of Massachusetts, Barbara Mikulski of Maryland, and Patty Murray of Washington.

The department has said it does not plan to conduct its own analysis of the overpayments, arguing that the number may not be “knowable.” The senators argue in the letter that the number is indeed “knowable” and that taxpayers deserve to know it. —Kelly Field

Posted on Thursday November 1, 2007 | Permalink |