Lanterna Rally

Author: GENERAL ACCOUNTING OFFICE WASHINGTON DC HUMAN RESOURCES DIV.

Publisher:

Published: 1987

Total Pages: 65

ISBN-13:

Since 1965, the Guaranteed Student Loan Program has provided over $60 billion in loans to students seeking a postsecondary education. Of these loans, students have defaulted on more than $4 billion, $1.3 billion of which occurred in fiscal year 1986. Because the costs of these defaults are generally borne by the Department of Education, Congressman William D. Ford, as Chairman of the Subcommittee on Postsecondary Education, House Committee on Education and Labor, requested GAO to examine what guaranty agencies-which administer the program at the state level-are going to protect the federal government's interest in collecting defaulted student loans. In particular, GAO was asked to describe (1) the loan collection practices and procedures of guaranty agencies, and (2) ways to reduce default costs. In subsequent discussions with the Subcommittee, GAO also agreed to examine the time defaulters are given to repay loans and whether agencies are promptly remitting the Department's share of collections.