From the Chronicle:
"Congress now votes on the levels of subsidy that are given to lenders participating in the federally guaranteed student-loan program. Advocates of an auction argue that it would use market mechanisms, rather than estimates by Congress, to set profit margins in the student-loan industry. Critics, including most lenders, argue that an auction would limit student choice to the lenders that emerged victorious in the government-run auction process."
Maybe student loan companies should worry about something else: both Edwards and Obama have come out in favor of eliminating their role in the federal student loan program.