Proposed College-Loan Savings Would Aid Early Ed.

Congress is considering a significant new investment in early-childhood-education programs and school facilities, paid for by a major—and controversial—overhaul of the federal student-loan program.

A bill 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, 2009.)

Instead, under legislation passed by the House Education and Labor Committee last month, all loans starting next July would originate with the direct-lending program, in which students borrow from the U.S. Treasury. The change would save about $87 billion over 10 years, according to the...