LAST WEEK, congressional Republicans proposed legislation to close loopholes in student loan laws that -- as we said on Sept. 10 -- have allowed lending institutions to make extraordinary, unwarranted profits in the past 18 months and could cost the Treasury $1 billion over the next year. "We are shortchanging students and we should stop it," said Sen. Judd Gregg (R-N.H.), chairman of the Senate Committee on Health, Education, Labor and Pensions. "This proposal will shut down excess subsidies to student loan providers," said Rep. John A. Boehner (R-Ohio), chairman of the House Committee on Education and the Workforce.

While we welcome this decision to stop wasting millions every day, the legislation raises a number of questions. Here's one: If a single bill can close these loopholes, why didn't that happen a long time ago? Committee spokesmen say they wanted to deal with the problem in a larger education bill, and they blame their Democratic colleagues for blocking one. They also rightly note that Democrats weren't remotely interested in this issue until a few weeks ago, when the Institute for Public Access and Success, an education think tank, fully documented the scope of the scam. But more recently, Democrats in both the House and the Senate have proposed simple ways to end the loophole immediately. In any case this clearly could have been fixed already.

Here's a more important question: Will this new bill permanently close the loophole? That's not as clear as it should be. For one thing the new legislation is temporary, putting an end to the scam for just one year. This, spokesmen say, is because the committees haven't fully decided how to use the "savings" earned from closing the loophole. We fail to understand why stopping the free flow of government money to lending institutions should result in "savings" or lead to new spending: Congress's primary interest here should be in halting waste as soon as possible, not in diverting wasted funds to another cause. More disturbing is the fact that a part of the loophole -- a financial technique known as "recycling" -- remains open. According to the Government Accountability Office, companies might be able to keep making up to 40 percent of the "excess profits." Although this possibility was left open to protect some nonprofit organizations, it is extraordinary that Congress cannot find a simple way to end this cleanly.

And here's a final question: Why has greater pressure not been placed on the Education Department to close this loophole? Another recent GAO report definitively declared that education officials could solve this problem without new legislation. Yet the administration's response to the discomfort over this loophole was a letter signed by Office of Management and Budget Director Joshua B. Bolten and Education Secretary Roderick R. Paige that called on Congress to act. Surely Congress, in its oversight capacity, should be asking Mr. Bolten and Mr. Paige to explain their failure to act 18 months ago.