September 29, 2008

Direct Lending Gains Participants as Troubles Plague Bank-Based System

By Paul Basken

Washington

Student borrowing through the Education Department’s direct-lending program has grown this year by nearly 50 percent, at the same time the bank-based alternative has grown reliant on a federal rescue plan and has become increasingly difficult for government watchdogs to monitor.

The department, in a series of new statistical reports released on Friday, showed that:

  • Nearly 400 new colleges joined the department’s direct-lending program this year,

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