G.O.P. Hopes Accounting Will Help Kill Direct Loans, Save Interest Aid

By Mark Pitsch

Washington

House Republicans said last week that they may scrap their plans to eliminate the in-school interest subsidy for graduate and professional students with student loans. And they plan to pay for it by killing the Clinton Administration's direct-lending program.

Many Republicans want to limit or eliminate direct lending, anyway. Critics argue that making loans directly to students, rather than through commercial lenders, is fraught with management pitfalls and that eliminating the profits of lenders and guarantors will not save as much money...