Bernanke: Time To Rethink CCRAA Subsidy Cuts

Abstract: In a letter to Sen. Christopher Dodd (D-CT) earlier this week, Federal Reserve Chairman Ben Bernanke said that the turbulence in the federal student loan market can only partially be blamed on the lack of liquidity. Subsidy cuts imposed on lenders through the CCRAA passed last year are also to blame, according to Bernanke who said Congress should revisit how it sets lender subsidy rates. Bernanke’s suggestion echoes a recommendation made by NASFAA in a discussion paper authored by Justin Draeger released last October: "Evaluating Student Loan Auctions."

The original article was published 05/02/08 in NASFAA’s Today’s News.