This letter to the editor by Secretary Spellings appeared in the Washington Post on May 30, 2007.

I appreciate The Post's editors agreeing with me that the student loan and financial aid system "needs a lot of work beyond tightening ethics rules" ["Belated Insight," editorial, May 20]. But it must be added that we are taking action.

This is not a new story. In 2001, the Bush administration inherited a problem-filled system. Millions of dollars of Education Department money could not be accounted for. Too many student loan borrowers were defaulting. Federal student aid programs had not received a clean audit opinion in years, earning placement on the high-risk list of the Government Accountability Office (GAO).

Today, we are far better able to monitor questionable practices, an improvement that can aid state attorneys general in their investigations. The student loan default rate has fallen, and we've had five consecutive clean financial audit opinions. As a result, in 2005 the GAO took student aid programs off its high-risk list.

We are committed to injecting more choice, competition and transparency into the federal student aid process. Our plan would ensure that every borrower has the right to choose any lender and would require schools with preferred lender lists to disclose how and why lenders were chosen. Recently, we closed a regulatory loophole that had allowed some private lenders to game the system.

We're also focused on the consumers of education—students and their families. With tuition outracing family incomes, we proposed the largest increase in federal Pell Grants in 30 years. And our Commission on the Future of Higher Education has offered new ways to make a college education more accessible and affordable.

But we have a long way to go. Stopping questionable lending practices will require a long-term commitment by Congress, the federal government, colleges and universities, and the private lenders themselves. Fortunately, that effort is well underway.

Margaret Spellings
Secretary, U.S. Department of Education
Washington