Washington, D.C. - The U.S. House of Representatives, on a vote of 232 to 111 today passed H.R. 3221, the Student Aid and Fiscal Responsibility Act of 2009, which eliminates the Federal Family Education Loan Program and shifts all student loans to the government-run and taxpayer financed Direct Loan program.  The measure effectively ends college student loans by private lenders. In 1993, under President Clinton, the government created a “public option” – the Direct Loan program – to compete with the private loan industry.

“In Texas many of our students secure funding for college through private lenders, loans that for many years have been widely available and affordable. Washington now has completed a government takeover of the college loan industry, and shifted the burden completely onto the American taxpayer”, said U.S. Congressman Kevin Brady (R-Texas).

Experts predict Texas will lose 1,500 jobs among private lenders – along with the elimination of free market competition.  Currently, estimates show that about three-fourths of college students and their families borrow through private lenders under FFEL.

Brady is also concerned about the cost of the bill. While proponents claim it will save $8 billion, budget gimmicks within the bill mask its true costs which experts say is closer to $50 billion – new spending which the government can ill afford.