Following is a statement by U.S. Secretary of Education Rod Paige on House passage today of H.R. 5186, the Taxpayer-Teacher Protection Act, which would end excessive special allowance payments to certain lenders under the Federal Family Education Loan Program (FFEL). The bill passed unanimously by a vote of 414 to zero.

"Congressional action to close the loophole that allows lenders to receive special allowance payments on FFEL loans permitting a return of 9.5 % was the right—and only—way to go to immediately address the problem. In fact, President Bush was one of the first to propose closing the loophole as part of his fiscal year 2005 budget, that, if enacted, would have reduced these special allowance payments by $5 billion. The president proposed spending those savings on increased benefits for students and teachers over the next decade.

"Despite partisan finger-pointing to the contrary, the loophole was not the making of this administration. It came about eight years ago when the Clinton administration interpreted an existing Department regulation. Federal courts in the District of Columbia have ruled that changes in regulatory interpretations require using the standard rulemaking process. That process ensures open and public debate. However, rulemaking would have been a protracted and lengthy process. In other words, the best and most expeditious avenue to close this loophole is through the legislative, not the rulemaking, process.

"I applaud Chairmen of the House and Senate Education Committees John Boehner and Judd Gregg for their leadership. The legislation not only closes the loophole but also wisely directs the savings to the nation's classrooms to help ensure that every child in America is taught by a highly qualified teacher, because we know teachers are the key to increased student achievement. I stand ready to have the U.S. Department of Education implement this legislative remedy as expeditiously as possible."

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