May 14, 2004

California's Public Colleges May Pull Out of Federal Direct-Lending Program

By ALYSON KLEIN

Leaders of public colleges in California are giving serious consideration to withdrawing from the federal government's direct-loan program in a deal that could protect them from further deep budget cuts as the state struggles to close a vast deficit.

Direct lending's supporters fear that if the Californians adopt the plan, which would affect 17 campuses in the state's two public university systems, it will give impetus to similar proposals in other states and put the program, already

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