Washington — When members of Congress return from a two-week recess on Monday, they’ll have plenty of paper awaiting them.

During the last two weeks, lenders and their lobbying groups have been furiously circulating alternatives to the president’s plan to end the federal guaranteed-student-loan program. They hope lawmakers will consider the proposals when they meet to craft a compromise budget blueprint that could call for cutting billions of dollars from the student-loan programs.

Today, Sallie Mae released a proposal that would essentially make permanent a loan-participation and loan-purchase program that Congress created last year in response to the credit crunch.

Under the proposal, which Sallie Mae says it crafted in response to requests from lawmakers from both parties, lenders would place loans they originated in a participation trust. The Education Department would then purchase a 100-percent interest in the trust for an amount equal to the loan principal. Lenders would be responsible for servicing each loan for up to 120 days after it was disbursed, at which point they would sell the loan to the Education Department.

That’s where similarities with the current loan-participation and loan-purchase program would end. Under Sallie Mae’s proposal, lenders could retain servicing rights on the loans, as long as they met standards set by the Education Department. When they didn’t meet those standards, or opted not to service their loans, the loans would be handled by a servicer chosen by the department through a competitive bidding process.

Lenders would no longer receive subsidies (special allowance payments), but they would receive a fee for servicing the loans during the 120-day period before the loans were sold, as well as an additional “put fee.” Before September 30, 2012, the servicing fee would be equal to 0.6 percentage points and the put fee would be $75; after that date, the fees would be set through a competitive bidding process.

Servicers would also share in the risk of default. If a borrower defaulted within four years of entering repayment, a servicer that had serviced the loans for at least two years would reimburse the Education Department for 3 percent of the loan balance. —Kelly Field