A member of Wisconsin's Congressional delegation wants to reform the student loan industry. Congressman Tom Petri (R-WI) says unethical practices among lenders are a growing concern for students across the country. The Wisconsin Republican says Guarantee Loan Programs are largely to blame. That's because banks and other financial institutions end up taking business that the federal government could already handle at a lower cost.
Petri says there are numerous examples of lenders abusing the system, such as recent accusations of the UW-Milwaukee recommending a lender because it offered better benefits to the school. He says almost every negative example he's heard is tied to Guarantee Loans.
Petri wants to end those programs and use those resources for the government's Direct Loan Program. He says that would eliminate the overhead and reduce the payments borrowers have to make. Petri is also developing federal legislation that would allow student borrowers to repay their loans directly to the IRS through payroll deductions.
AUDIO: Andrew Beckett reports (MP3 1:09)
