North Carolina Senator John Edwards, who is seeking the Democratic presidential nomination, has called for eliminating the role of banks and making loans to college students directly from the federal government. Edwards predicts that this change would save "billions of dollars" each year and, at the same time, increase by 3 million the number of students who could receive these loans.

Presently, loans are made by banks and other financial institutions to student borrowers, although the federal government does offer subsidies to these lenders to lower the rates students pay on the loans. Under Edwards' plan, all of these loans would come directly from the federal government.

Edwards called for revamping the college loan program as part of his "college for everyone" proposal. Under his plan, all students who pass college prep courses and agree to work at least 10 hours per week would be offered free tuition at public universities or community colleges.

Other provisions of his plan include: an end to "legacy" admissions, where colleges routinely admit the children of their alumni and 2) an increase in the Pell Grants, which are avilable to low-income students having difficulty financing college costs.

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