A budget agreement that California's public universities struck with Gov. Arnold Schwarzenegger may be as noteworthy for what's not in it as for what is.

According to Brad Hayward, a spokesman for the University of California, the agreement does not include a provision requiring campuses in the state's two public-university systems to withdraw from the federal direct-student-loan program.

Officials at the University of California and the California State University System acknowledged last month that they were considering leaving the program as part of a deal with the governor's office that would protect them from deep budget cuts (The Chronicle, April 29).

Mr. Hayward said on Tuesday that he did not know whether the budget deal's lack of a provision on direct lending meant that the idea was off the table entirely. "It's just one of many, many discussions around higher-education issues as the state is grappling with all these fiscal problems," he said.

The deal, if approved by the State Legislature, would affect higher-education financing in California for the next several years.

Negotiations surrounding the proposal took place behind closed doors, with few details available publicly. Direct-lending supporters had worried that it might require colleges to leave the program and work with the California Student Aid Commission, the state's guarantee agency.

Direct lending, which was created by Congress in 1993, provides loans directly to students, eliminating the role that banks and guarantee agencies play in the federal government's main student-loan program.

There was no explanation for the exclusion from the budget deal of a provision to move more colleges into the program run by the state's loan-guarantee agency. At a news conference on Tuesday, Diana Fuentes-Michel, director of the California Student Aid Commission, said the idea had not been embraced by either the governor's office or the Legislature.

"There's not a lot of support for that," Ms. Fuentes-Michel said.

The decision not to pursue a deal involving direct lending comes less than a week after officials at the U.S. Department of Education questioned the legality of a similar proposal that is under discussion in New York State