Obama consolidating loans

The Education Department has said these 5.8 million borrowers are more likely to default, though why is a matter of some dispute.Administration officials attribute it to the fact that borrowers must make payments to two or more entities, while others say the Education Department has failed to fully replace the support for borrowers and colleges that lenders and guarantee agencies had under FFEL.Officials said they changed course because they did not believe the Republican-controlled Congress would act to make the changes.Focus on Direct Lending The hearing Tuesday morning focused on difficulties that colleges encountered while switching to the direct loan program.

Just a few hours earlier, during a hearing on the transition from bank-based loans to subsidized loans, Rep.

Department officials said that the consolidation and expansion of income-based repayment will pay for itself, with some of the subsidies presumably supporting the loosened income-based repayment rules.

They did not say what would happen with any leftover funds from student loan repayment.

The changes to income-based repayment would apply only to current students.

But administration officials said they hope they will draw more attention to the existing program as well: only about 450,000 borrowers are currently enrolled, although administration officials said many more could benefit.

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