Key official endorses student loan plan

WASHINGTON, July 10 (UPI) -- The chairman of the U.S. House Education Committee announced Friday he will support President Barack Obama's plan to federalize all student loans.

Rep. George Miller, D-Calif., told The New York Times he will introduce legislation next week to replace the federally subsidized student loan program with direct government lending.

Private loan industry officials and some private non-profit lenders object to the proposal. They told the Times Obama's plan would eliminate competition for loans and confuse the matter for students who now have loans.

The loan officials presented a plan to Congress and the White House, but congressional Democrats, the White House and officials at the federal Education Department rejected it, claiming it would direct $15 billion to banks. The government plan would use that money for grants for low-income students.

A Congressional Budget Office statement said the president's proposal would save the government about $87 billion over 10 years.