Five years after the Clinton administration took over the student loan program, its costs have topped $300 million and are expected to rise. Critics say the direct loan program, is beset with mismanagement and inefficiency. The direct loan program administered by the Department of Education and competes with government-guaranteed loans made by banks. It was supposed to be more efficient and less costly.

• Although the Education Department had expected the government loan program to capture the entire student loan market within three years, it now accounts for just under one-third of student loan volume.

• Processing delays and a massive backlog last year stalled some 34,000 applications and forced the government to stop accepting new ones for three months.

• In 1996, some 900,000 financial aid requests were delayed.

• Nearly two-thirds of schools in the direct lending program complain of red tape and the satisfaction rate had dropped to 68 percent by 1996 -- compared to 89 percent in the program's first year.

Schools are starting to opt out of the program. The net number of schools participating has dropped some 20 percent in the past two years.