The student loan industry is keeping a close eye on Greg Woods.
As chief operating officer of the government's newly created Office of Student Financial Assistance Programs, Mr. Woods' mission is to make the federal student loan program more efficient. For starters, he is centralizing the 12 piecemeal computer systems used to process everything from student loan applications to Pell Grant awards.
So far, so good.
But he's also pushing "Access America for Students," which is part of a sweeping initiative to give people electronic access to government services.
Critics claim the program is another attempt by the Education Department to wrest student loan business from banks. But Mr. Woods said Access America is only designed to cut the time students spend waiting for their loan paperwork to be processed.
Mr. Woods said Access America, to be started up in the summer as a pilot program in five to seven schools, will give students electronic access to the loans and grants they receive from the government. Students could also apply for government loans over the Internet.
Banks fear Mr. Woods, who is responsible for regulating private-sector lenders, will use Access America to give the government's direct lending program a competitive edge.
"The technology would make it easier for the government to originate student loans," said John Dean, a partner at Dean Blakely & Moskowitz and special counsel to the Consumer Bankers Association.
Henry B. Howard, chief operating officer and director of BAC International Credit Corp., Miami, one of the country's biggest student lenders, said he was concerned about Access America "because its purpose as well as its intentions have not been clearly disseminated."
"We don't want it to be a stalking horse for the direct lending program," Mr. Howard said.
Lenders also fear Access America will be expanded to cover government- guaranteed funds loaned by banks. They argue that could upset the relationships banks have worked to cultivate with schools and use to market their services to students.
Mr. Woods denied the program will ever encompass private lending. "We don't propose to disrupt that relationship" between schools and banks, he said. "That's exactly what we're trying not to do."
Education Secretary Richard W. Riley designated Mr. Woods on Dec. 1 to head the student loan office, which was created by the Higher Education Amendments of 1998. It is the government's first "performance-based organization," which means funding is contingent on how well it achieves its goals.
But some legislators are questioning whether Mr. Woods' unit is already off track. In a Dec. 15 letter to Mr. Riley, three House Education Committee leaders said the Office of Student Financial Assistance Programs was only supposed to improve service and reduce costs-not set policy. The lawmakers questioned why several divisions with policymaking responsibilities were being melded into Mr. Woods' office.
"Our concern is that the clear distinction drawn in the legislation between operational and policy/regulatory responsibilities is being blurred," wrote Reps. William F. Goodling, R-Pa., Howard P. "Buck" McKeon, R-Calif., and Pete Hoekstra, R-Mich.
Mr. Riley has until Jan. 4 to respond to the letter.
Mr. Woods, 56, left an Albuquerque-based software company in 1993 to join Vice President Gore's effort to "reinvent government."
"I came to Washington with the hope that the reinventing government project might take hold," he said. "I thought government had lost touch with the people and with the concept of customer service."