The U.S. Department of Education has announced plans to end a program that its supporters say has helped drive down the default rates on student loans.

Under the program, the department reimburses a select group of guarantee agencies on the basis of their success in averting defaults, rather than on the basis of their collections on defaults. Congress created the program in 1998 to encourage guarantee agencies to focus more of their efforts on preventing students from defaulting in the first place.

But Congress also required that the program be “cost neutral,” and the department estimates that it will cost the federal government $2-billion over the next 10 years, even taking into account the savings from default reductions. The department says that it has no choice but to end the program, given its cost.

Some members of Congress are fighting the department’s decision, saying it will cause default rates to rise. On Monday, Democratic leaders of the House and Senate education committees sent a letter to Secretary of Education Margaret Spellings urging her to reconsider. —Kelly Field