Nobody should get too excited about President Clinton's proposal to expand the government's share of the student lending market to 100% - at least not yet.

With Republicans firmly in control of the legislative process, the student lending initiative, contained in the President's budget, is dead on arrival. Thus, the rationale for the 100% figure appears to be the notion that the best defense is a good offense.

Rep. William F. Goodling, chairman of the House Economic and Educational Opportunities Committee, wants to limit the government's share of the market to 40% - down from the 60% permitted in current law.

Rather than fight the GOP on its own terms, President Clinton raised the ante - apparently hoping Republican lawmakers will accept his number as a reasonable parameter in the inevitable negotiations.

Fat chance. Rep. Goodling and his colleagues don't think the government has much business running a loan program. In fact, industry sources say the Pennsylvania Republican is under pressure from some of his party's freshmen members to push legislation ending the direct lending program altogether.

That doesn't mean the industry is out of the woods. Rep. Goodling may hate the idea of having the federal government in the direct lending business, but he has to deal with the relentless reality of the federal budget deficit.

The administration says the direct lending program saves money, and serious money at that. The program currently produces budget savings - not necessarily the same thing as real money - of $5.2 billion over five years in the administration's reckoning.

By going to 100% market share, the administration says it can save $12 billion over the same time period. Cutting back to a 40% share (from 50% projected for this year), by contrast, costs the government $1.2 billion.

"That's $1.2 billion Mr. Goodling has to find somewhere else," said Leo Kornfeld, senior adviser to Secretary of Education Richard Riley.

Both President Clinton and the congressional Republicans have programs of their own to fund - and money from the direct lending helps both sides, Mr. Kornfeld said.

Which is to say, maybe the Republicans don't like the idea of the federal government as lender, but if it helps pay for a capital gains tax cut, why fight it?

"This is an option," he said. "They may not like it, but lots of us end up accepting things we don't like."

Bankers believe the administration's accounting is hopelessly flawed.

"It doesn't account for defaults, it doesn't account for the massive bureaucracy that they are building up to service the loans," said John Dean, a lawyer who represents the Consumer Bankers Association on student lending issues.

Bankers believe that an honest accounting of the issue would result in a dramatic change in the estimates. But absent a radical change in accounting methods, opponents of direct lending have to battle the deficit monster along with the President.

Still, the real problem for bankers doesn't arise this year. Rep. Goodling may not get everything he wants, but he's going to get a lot more than the President. The real problem comes next year, when President Clinton returns to the campaign trail.

Student lending is an issue the President appears to feel deeply about, and he appears to have the backing of the American people on it. You can give odds that the student lending issue - pitting a virtuous government and worthy students against vile money changers - will become a standard part of his stump speech.

"When he brings it up, and I've been present when he has, it always gets applause," said Joe Belew, president of the Consumer Bankers Association.

So bankers may win the battle this year, but the war isn't over. Come the new year, when the campaign begins heating up, they could find themselves playing a major, and uncomfortable, role.

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