Direct Lending Inches Forward

College Guide earlier reported on Obama’s plan to move all federal student loans to a direct distribution system. Many colleges, and many banks, were opposed to the direct lending proposal.

Well they’re coming around. According to an article in Inside Higher Ed:

The Education Department reported this week that 96 percent of colleges had taken at least some crucial steps toward being able to issue loans through the government-run program, to which legislation passed by the House and pending in the Senate would shift all federal student loan origination.

Colleges aren’t moving faster on this because the student aid bill is a low priority behind health care reform. Many schools are betting that major changes to student aid won’t happen until at least 2011-12.

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Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer