"Student borrowing through the Education Department's direct-lending program has grown this year by nearly 50 percent, at the same time the bank-based alternative has grown reliant on a federal rescue plan and has become increasingly difficult for government watchdogs to monitor," The Chronicle of Higher Education reports. "The department, in a series of new statistical reports released on Friday, showed that Nearly 400 new colleges joined the department's direct-lending program this year, with their students borrowing $16.4-billion, while student borrowing through the bank-based system of loan companies using federal subsidies dropped 3 percent, to $30.6-billion. Direct lending has remained far smaller than the bank-based system - about a fifth of the size in recent years - as loan companies used their subsidies to give students lower rates and offer colleges more attentive service. The audit issued on Friday by the department's inspector general, meanwhile, added to an accumulating body of evidence of the complexity of the bank-based system. The audit cited department estimates that taxpayers lost $258-million in annual improper payments in the bank-based system in fiscal year 2006 but only $2-million in fiscal year 2007."