Senator Mike Johanns called on Secretary of Education Arne Duncan to retract his recent letter advising colleges and universities to move toward a 100-percent government-run student loan delivery system.

The idea of eliminating private competition in the student loan industry was first proposed in the President's budget, but legislation to require this conversion has not yet come before the Senate. Secretary Duncan disregarded concerns raised by Senators and sent a letter to colleges and universities on October 26, urging them to ensure their institutions are direct loan-ready by the 2010-2011 academic year. Senator Johanns wrote a letter to Secretary Duncan noting that students benefit from competition in the market and efforts to stifle that competition are misguided.

"The Obama Administration seems intent on denying competition and ramming through a federally-run student loan system," Johanns said. "By encouraging institutions of higher learning to move quickly to a government-run system, it appears the White House is trying to end run Congress and strong-arm its way toward nationalizing the student loan industry."