US lawmaker to back Obama student loan shake-up

WASHINGTON, July 14 (Reuters) - The head of a key U.S. congressional panel will introduce legislation on Wednesday calling for ending a college student loan program that for years helped lenders such as Sallie Mae (SLM.N) thrive.

The troubled Federal Family Education Loan Program, or FFELP, would be discontinued in July 2010 under a bill to be offered by Democratic Representative George Miller, chairman of the education committee of the House of Representatives.

Like a proposal made in February by President Barack Obama, Miller will call for conversion next year of all new federal student lending to the U.S. Education Department's "stable, effective and cost-efficient Direct Loan program."

That change would save U.S. taxpayers $87 billion over 10 years, said a statement from Miller's office.