The Federal Direct Student Loan Program, which enables students to borrow directly from the federal government rather than private institutions, is facing possible cuts and elimination by Congress, said Stephanie Babyak, a spokesperson for the U.S. Department of Education.

The highly successful program is now under the gun, Babyak said.

The House Subcommittee on Appropriations has recommended a decrease in the program’s administrative budget from $550 million to $320 million. This cut, Babyak said, will hinder the loan program’s ability to operate as it has in the past.

The subcommittee will give its recommendation to the full committee today, Babyak said.

Iowa State was one of the first 104 schools to participate in the program, which started in 1994. According to a U.S. Department of Education news release, the number of schools has increased to roughly 1,400 as of July 1. These schools constitute approximately 40 percent of total student loan volume.

There is a proposal in Congress to cap the percentage of loans granted through the program at the current 40 percent, Babyak said.

Another proposal is to eliminate the program entirely, Babyak said.

The Federal Direct Loan Program has paid dividends for ISU students, said Earl Dowling, ISU financial aid director.

“It is probably one of the most student friendly … student aid programs in existence,” Dowling said. “It puts the student in charge of her or his student loan.” It reduces what used to be a seven-department process, he added.

“That’s the potential for seven delays, seven errors of omission, seven typographical errors, seven times someone could not read someone else’s handwriting,” Dowling said.

The aim of the program was to make the loan process simple and efficient, Dowling said.

It has been successful in doing so, said Kim Reeder, a loan processor and junior in biology.

“It’s made things easier. There are not as many problems with students loosing applications,” said Reeder.

Deb Meyer, a graduating doctoral candidate in textiles and clothing, is happy with the direct loan system as well.

“I was on [the direct loan program] for a year previously,” said Meyer. “I like this system better. It is easier.”

Dowling said he hasn’t received a single letter from a loan recipient expressing dissatisfaction. He does receive letters from the private lenders who stand to lose millions under the new program, said Dowling.

“For years, they’ve earned these dollars on the backs of college students,” Dowling said. “It’s so frustrating for us to read what’s happening in Washington with respect to saving the budget,” Dowling said.

Private lending institutions have mounted a very successful lobby on Washington, Dowling said.

Results of a survey run by the financial aid office at Iowa State revealed that more than 90 percent of students polled at the office were satisfied with the service.