House Panel OKs Major Student-Loan Overhaul

Washington

A major overhaul of the federal student-loan program would be used to help finance a significant boost to early-childhood-education programs and school facilities, under a bill approved yesterday on a partisan vote by the House Education and Labor Committee.

The legislation—which is based largely on a proposal put forward by President Barack Obama in his fiscal year 2010 budget request—would scrap the Federal Family Education Loan Program, under which the government subsidizes private lenders to make federal loans. ( “President’s Education Aims Aired,” Feb. 28, 2008.)

Instead, starting in July of next year, all loans would originate with the direct-lending program, in which students borrow right...