Direct or indirect loans? Either way, it's win-win deal for major political contributor Sallie Mae

With deficit worries gripping Washington, lawmakers including House Education and Labor Committee Chairman George Miller (D-Calif.) and Rep. Thomas Petri (R-Wis.) have proposed cutting taxpayer subsidies to private institutions that issue student loans. Legislation empowering the government to become a larger student-loan provider without a so-called middleman sailed through Miller's committee Tuesday and now awaits the full House's vote. The bill has President Barack Obama's strong support. Proponents of the Federal Family Education Loan Program, however, oppose this reform. This 40-year-old system allows lenders such as Sallie Mae, while no longer an explicitly government-sponsored enterprise, to collect big profits on Treasury-backed loans. As a result, Sallie Mae-officially known as SLM Corporation-has long tried to maintain FFELP and block the expansion of direct-loan programs. The company has backed these policy stances with big money.