Bernanke suggests student lender subsidies review

WASHINGTON, May 1 (Reuters) - The chairman of the Federal Reserve has suggested that Congress revisit the issue of government subsidies to student loan providers, according to an April 25 letter made public on Thursday.

Fed Chairman Ben Bernanke, in a letter to Senate Banking Committee Chairman Christopher Dodd, said recent student loan market problems stem from many causes, including cuts made last year by Congress in lender subsidies.

"Congress may well wish to revisit the question" of whether setting hard subsidy levels for loan providers is the best approach, Bernanke said in the letter.

"You may decide that a more market-sensitive approach -- flexible enough to provide a wider spread during times of market stress and a narrower one during normal times -- could provide a more robust structure," he wrote. (Reporting by Kevin Drawbaugh; editing by John Wallace)