WASHINGTON -- Citing a Congressional Budget Office analysis, the Consumer Bankers Association is urging the Clinton administration to drop its proposal for direct government lending to college students.

Earlier this week, the CBO said that when administrative costs are accounted for, the White House direct-lending proposal would reduce costs by $2 billion, rather than the $4.3 billion originally projected.

"President Clinton has stated repeatedly his commitment to avoid smoke and mirros budgeting.' " the trade group said in a letter to Education Secretary Richard Riley.

"In light of this new information, CBA believes it is fully appropriate for the department to reconsider its support of direct loans," said the letter, signed by the group's president, Joe Belew.

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