WASHINGTON -- Sen. Paul Simon accused the Student Loan Marketing Association and a state guarantee agency of creating "sham" student organizations to lobby against the White House plan for direct lending by the government.

In a news conference Tuesday, the Illinois Democrat introduced a University of Wisconsin student who said he had witnessed efforts by Sallie Mae to "manufacture grass-roots student opinion."

Student Says Airfare Was Paid

The student, Robert Kraig, said he had flown to Washington as a replacement for another student for a "lobby day," and had learned eight hours before departing that his trip had been paid for by Sallie Mae.

Mr. Kraig, a graduate student in communications, said he had considered not taking the trip but "decided to go along and see what they were doing."

Mr. Kraig said he had not been coerced into supporting Sallie Mae's position, which favors continuation of the existing system of guaranteed lending by banks.

Also at the news conference. Deepak Pateriya, an employee of the United States Student Association, said an Ohio guarantee organization had placed ads denouncing direct lending on behalf of "Ohio Students for Loan Reform."

An |Outrage'

Sen. Simon was sharply critical of the guarantee groups, noting that they are organized under state or federal charters.

"These efforts to pressure senators through sham student groups is the latest outrage in an all-out lobbying campaign orchestrated by Sallie Mae and its allies," he said. "Is it legal? It probably is. Is it an outrage against students and taxpayers? It certainly is."

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