The US Congress passed legislation in 1990 and 1992 to crack down on borrowers and trade schools such as beauty colleges and truck-driving schools that promised more job training than they delivered. And the country began to pull out of a recession in early 1991.

"The student loan program is now a shining example of government providing opportunity with accountability," US President Clinton said in a statement.

Stricter government controls have eliminated more than 1,000 schools from the program, while a better economy means "there are jobs for those who finish college, so they can pay off their loans," Clinton said.

The departmentnoted that the default rate has declined even though the volume of loans has risen dramatically, from about $14 billion in 1992 to $38 billion in the 1998 fiscal year.

Because of the volume, actual dollar savings aren't as dramatic as they could have been. In 1991, for example, the department had to repay $3.6 billion in default claims to lenders. In fiscal 1998, the department had to repay $2.8 billion.

The department was still compiling information on how much money it was able to collect from students who had defaulted, but preliminary estimates show an increase from $900 million last year to $980 million this year.

A new higher education bill approved by the US Congress will further streamline the program and make it more accountable, said Rep. Bill Goodling, R-Pennsylvania, chairman of the Education and Workforce Committee.

"Less time and money spent on delinquent loans means more time and money to help needy students receive financial assistance," Goodling said.

Liffe to cut 600jobs

The London International Financial Futures and Options Exchange said on Monday it would cut its workforce from 1,000 to less than 400 by the end of next year as part of a restructuring programme designed to clear the way for partnerships with other financial institutions, says The Financial Times.

The job cuts were part of a restructuring programme approved on October 20. Liffe declined to specify where the job cuts would be made until staff were fully informed. Redundancies will start rolling out in December, the exchange said.

Liffe said it also planned to reduce by half its operational costs. Last year these costs were about £130m. Brian Williamson, Liffe chairman, spoke of a need to "act decisively and quickly" to update its regulatory structure and re-establish its position in the industry because of intense competition from Eurex, the Swiss-German alliance that has gained much of Liffe's business in the past year.

Mr Williamson said: "It is clear that nothing remotely like ourcurrent cost base is sustainable and that we shall have to cut jobs to remain competitive. We will also achieve cost savings by overhauling our regulatory structure so that its suits today's markets."

Liffe said its regulatory structure was a legacy of the pit-based Chicago exchanges. Since Hugh Freedberg, chief executive, and Mr Williamson were charged with reviving the struggling exchange, Liffe has unveiled plans for an electronic trading platform, which is scheduled to be launched in April next year. But many of its own members and other financial institutions have criticised the slow pace of reform.

Liffe said it would seek to form alliances with a number of organisations but declined to be more specific. The exchange has expressed an interest in closer ties with the London Clearing House. Mr Williamson said any Liffe-LCH combine would make London a more attractive clearing location, with lower transaction and capital costs.

However, Liffe hinted there could be news of a partnership before the endof the year as it built on "existing relationships".