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Sen. Clinton: kill guaranteed student loan program

WASHINGTON
Thu Oct 11, 2007 6:53pm EDT

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Senator and Democratic presidential candidate Hillary Clinton attends a fund raising event in Oakland, September 30, 2007. Clinton proposed eliminating federally guaranteed student loans on Thursday, a move that would shake the foundations of the $85 billion student loan industry. REUTERS/Kimberly White

WASHINGTON (Reuters) - Democratic presidential front-runner Hillary Clinton proposed eliminating federally guaranteed student loans on Thursday, a move that would shake the foundations of the $85 billion student loan industry.

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Lenders such as Sallie Mae, Citigroup and Bank of America do a big business in extending federally guaranteed loans to college students.

In a campaign Web site posting, the New York senator said she would pay for a range of higher education reforms "without increasing the deficit by eliminating the guaranteed student loan program."

The guaranteed loan program was hit by deep federal subsidy cuts earlier this year under legislation passed by Congress and signed by President George W. Bush.

A spokesman for America's Student Loan Providers, which represents the industry, said: "The student loan community hopes that Sen. Clinton will reconsider this part of the proposal and recognize the value to borrowers of choice."
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