The Congressional Democrats complain about colleges and universities that maintain so-called “preferred lender lists.” Their complaint is that the preferred lender list may mislead students about the companies from whom they can borrow. Congress wants students to know that students can borrow from any participating lender, not just those on a school’s preferred lender list.

It’s ironic, really. The only federally funded student loan program in which students don’t have a choice of lender is the FDLP. Yes, that’s right. FDLP participants don’t have a choice of lender. Congress wants to put all student borrowers into the FDLP, thereby eliminating choice from student loan lending altogether. Congress complains that students may not be fully aware of their lending choices in the FFELP, and yet, choice is exactly what gets extinguished under the Congressional Democrats’ plan.

Why is lending choice so important? When students choose among many lenders, they strengthen the FFEL program. If a borrower can choose among lenders, the borrower can go anywhere. If one lender offers a better deal, fewer fees, or better interest rates, the borrower wins. On the other hand, when choice is stifled and competition is eliminated, borrowers have no choice and cannot find the terms that best meet their needs. Lenders don’t need to compete, so they can impose whatever terms they like. Without competition, borrowers lose.

The government wants to force borrowers into programs that are designed to turn student loans into losing propositions. The borrower loses. The lender loses. The universities and colleges lose. Millions of middle class American families lose. The country loses.

Why does Congress want to switch successful student loan lending programs into loser mode? Congress doesn’t really want to back your student loans anymore, and it’s easier to cut support for higher education funding when Congress has more control over the program. Student financial aid comprises a large chunk of the Federal government’s budget each year. Without meaningful cost controls on the rise in tuition, the only thing Congress can control is what portion of your education they subsidize.

Congress wants to send a message to American families, which is “Don’t look to us for help with college funding anymore.” Unfortunately, it will take years for American families to prepare to cover the outrageous cost of higher education. In the mean time, they’re using current college students as political pawns by promising lower interest rates and other “benefits” they have no intention to deliver.