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Federal File: The student lobby?

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Backers of President Clinton's direct student-loan proposal last week accused the Student Loan Marketing Association and other private-sector participants in the federal loan program of using unprincipled tactics in their effort to derail the plan.

At a news conference last week, supporters of the plan--which would eventually replace the current guaranteed-loan system with one in which the government lends money to students through their colleges--claimed that their foes are using students as "front men.''

The event, arranged by the Education Department and Sen. Paul Simon, D-Ill., featured testimony by a college student, a higher-education lobbyist, members of Congress, and Deputy Secretary of Education Madeleine M. Kunin.

Robert Kraig, a University of Wisconsin student, said Sallie Mae flew him to Washington and asked him to organize a student group on his campus that would support the current system.

"It's very suspicious to have a major loan purchaser pay to have students come out to Washington,'' said Mr. Kraig, who said he accompanied another student who had arranged the trip.

A Sallie Mae spokeswoman said its officials simply expressed their views to the students.

"We didn't ask them to go out and lobby or form an organization,'' she said. "They called and wanted information, so we agreed to talk to them.''

Sallie Mae flew the students to Washington after first offering to fly agency officials to Wisconsin, she said.


The direct-loan backers also criticized the efforts of the Student Loan Funding Corporation of Ohio, which has placed ads in Ohio student newspapers urging students to write their elected officials in opposition to the direct-loan proposal.

The plan's backers alleged that the company created a student organization called Ohio Students for Loan Reform to promote the current system.

Mark Weadick, the senior vice president of the Ohio guarantor, said that, while his company has provided financial support to the student group, it did not create the ads. Students for Loan Reform, he said, is composed of 10 student-government presidents from Ohio colleges.

The student-loan industry has also engaged in other forms of persuasive activity, and has reportedly enlisted the aid of some of Washington's most powerful lobbying firms.

Senator Simon suggested the creation of the alleged front groups marks a new low. "I can't remember [lobbyists] creating a sham organization--the Cigarette Lovers of America or Students for Cigarettes,'' he said.--M.P.

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