GAO: State Universities Top Participants in Direct Loan Plan

State universities and for-profit trade schools are the most likely to participate in the government's direct student loan program, according to a General Accounting Office report.

The report, released Monday, found that 42% of public four-year universities and 41% of trade schools are enrolled in the direct loan program.

Private universities were next, with 17% participating. Public and private community colleges rounded out the list, with 11% and 10%, respectively, in the program.

The government has made direct loans to students in all 50 states. Thirteen states, including Massachusetts, Maryland, Virginia, and Oregon, received at least half their student loans through the direct loan program.

Of the 4,690 schools in the government aid program, 1,622 participated in the direct student loan program. But researchers also found that participants include half the 100 largest universities.

Bankers have opposed the Clinton administration's direct student loan program since its inception in 1994. They argue that a competing program, in which the government guarantees bank loans to students, is more cost- effective. The GAO report did not address which program costs less.