WASHINGTON - President Bush signed legislation yesterday that will test the idea of letting colleges make and service student loans, a radical departure from the current system comprising banks and state education authorities.

The new law creates a four-year demonstration program beginning in 1994, under which the federal government will provide seed money to colleges to set up revolving loan funds for student aid.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.