[Congressional Record Volume 141, Number 200 (Friday, December 15, 1995)]
[Senate]
[Pages S18731-S18732]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             STUDENT LOANS

  Mr. COATS. Mr. President, I would like to clarify the remarks I made 
on 

[[Page S18732]]
the floor earlier today with respect to the size of the direct loan 
program. The Federal Direct Student Loan Program was originally 
authorized to administer 5 percent of total loan volume as a 
demonstration program. In 1993-94, the first year of the Direct Lending 
Program, the Department of Education was authorized to administer 5 
percent of total loan volume. The Balanced Budget Act of 1995 imposes a 
10-percent cap on direct loans, and ensures that all schools who 
participated in the first year of the program will continue to serve as 
the demonstration group, thereby allowing a proper test to take place.
  I would also like to be very clear about the impact of the proposed 
10-percent cap: a 10-percent cap on direct loans will in no way affect 
any student's ability to receive a student loan. The law requires that 
the eligibility requirements for both loan programs be identical, and 
therefore a 10-percent cap on direct loans will not limit any student's 
ability to receive the loans they need to attend college. The 
administration continues to try to frighten students and their families 
by implying that a cap on direct lending will limit student loans, but 
this is simply not the case: a cap on direct lending only affects how 
the loans are delivered--it does not affect loan access or 
availability.

                          ____________________