WASHINGTON - Cuts in the federal Guaranteed Student Loan program proposed by a Senate education committee could make profit margins too tight for many banks to keep making loans, lobbyists and state education officials say.

If many of the 7,800 banks that now make student loans were to leave the business, that would presumably lessen the need for tax-exempt student loan bonds. State education authorities use bond proceeds to purchase the federally guaranteed loans from the banks.

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