Cost of Loans Disputed

The March 24 editorial "Close the Spigot" said, and an April 9 letter from Rep. Thomas E. Petri (R-Wis.) and Sen. Edward M. Kennedy (D-Mass.) repeated, the claim that privately administered student loans cost 10 times more than the loans made by the government.

This number and the formula used to arrive at it are greatly in dispute. A recent study by PricewaterhouseCoopers -- and analyses by the Government Accountability Office, the Congressional Budget Office, the Education Department's inspector general and others before that -- found that the budget scorekeeping rules seriously understate the costs of direct loans.

In fact, the department's financial statements show that the annual projected savings of the direct-loan program have never materialized. Since 2001 their cost has been revised upward by $7.7 billion, while guaranteed loans' cost was reduced by $11.3 billion.

KEVIN BRUNS

Executive Director

America's Student Loan Providers

Washington