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Panel likely to back student loan changes

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Reuters / November 14, 2007

WASHINGTON - The $85 billion student loan industry and the sprawling US college aid system it serves are in for another round of changes under legislation expected to win easy approval today from a congressional panel.

The bill to come before the House education committee would make lenders and colleges adopt codes of conduct governing student loans, part of a crackdown following scandals this year in the loan market.

Students and parents would get more information about borrowing under the bill and, for the first time, colleges would be explicitly urged to restrain tuition inflation.

The measure has wide support. The committee chairman, George Miller, a California Democrat, is sponsoring it.

The panel's senior Republican, Representative Howard McKeon, also from California, said the bill "reflects bipartisan collaboration."

Swift passage on the House floor is expected by aides from both parties.

The Senate already has passed similar legislation.

But the House and Senate versions differ, so reconciling them into a single package to send to President Bush may take a while longer.

"There are significant differences between [the House] bill and the reauthorization legislation that passed the Senate" in July, said Mark Kantrowitz, a student aid specialist who runs the website, FinAid.org.

By that time, students and parents will be headed into the annual American spring rite of filling out applications for financial aid, and the rising cost of higher education may have emerged as a more prominent presidential campaign issue. Both bills would give students more information about borrowing.

The three Democratic primary front-runners - Hillary Clinton, Barack Obama, and John Edwards - have said they would end the scandal-tarred federally guaranteed student loan program that is the heart of the student lending network.

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