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Education Secretary testifies on loans

May 13, 2007 at 10:16 AM   |   Comments

WASHINGTON, May 10 (UPI) -- Education Secretary Margaret Spellings said Thursday that the system of federally backed student loans in the United States is "broken."

Spellings testified for about three hours before the House education committee, the New York Times reported. She said that she had done her best to oversee student loans but that the increased dependence on private lenders has made the system too big for the department to handle.

"The system is redundant, it's Byzantine and it's broken," Spellings said.

The committee is investigating a scandal involving the relationship between lending companies and universities. Rep. George Miller, D-Calif., also questioned her about allegations of dubious subsidies for some lending companies and conflicts of interest involving Education Department officials and Reading First, a program recommended by the department.

"When I look at the whole body of evidence that has been amassed about both the student loan and Reading First programs, it is clear that -- at a minimum -- the Education Department's oversight failures have been monumental," Miller said.

Spellings insisted that under her leadership oversight has been "vigorous."

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