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NEW YORK — Shares of SLM Corp. and other student lenders plunged Thursday after President Barack Obama proposed eliminating the role of private industry in the federal government’s college-loan program.
There are currently two parallel systems for college loans — students can borrow directly from the government or take out loans from banks and other private lenders that are subsidized by the government.
In his budget proposal for 2010, Obama asks Congress to shift the entire system to direct government loans and eliminate subsidies to banks. The move would save more than $4 billion a year, according to the Obama administration.
