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DCCUMENT RESUME
05649 - C 812862321
Status of Office of Education's Naticnal Direct Student Loan
Punds at Selacted Postsecondary' Education Instituticins.
RD-78-94; B-164031(1). May 2, 1978. 3t pp. + 5 appendices (9
-P-) -
Report to Sen. Edmund S. Muskie, Chairnan, Senate Committee on
Budget; by Elmer J. Staats, Comptroller General.
issue Area: Federally Sponsored or Assisted Educatics Programs:
orqanization and managesent of Federal Education Programs
(3301).
Contact: Human Resources Div.
Budget Function: Education, Manpower, aud Scial Services:
Higher Education (502).
Organizatior- Concerned: Office of Education.
Congressional Relevance: Senate Committee on Budget. Sen. Edmund
S. Muskie.
Authority: lational Defense Education Act of 1958, title IIi
Education Amendments of 1972; Higber Education Act of 1965,
title IV, as amended (20 U.S.C. 1087aa-ft). H.R. 671S (95th
Conq.) .
Enabling legislation for the National Direct Student
Loan Program, Leq un in 1958, intended that schools attain a
revolving ,und status for this program. 7he net cuoulativa
Federal cap.tal contribution to the program has totaled cver
$3.6 billion since the program began, uith fiscal year 1977
appropriptione totaling $323.2 million. Findings/Conclusions:
Each paLticipating school 4iffers in its akility to achieve a
revolving fund status for the program because Ecstsecondary
schools manage the program differently and vary in the degree of
diligence with which they attempt collecticn of loan accounts;
loan delinquency problems differ depending on the type of
institution; direct loan program legis]aticn requires all
schools to make ioans to nearly all eligitle students,
regardless of their credit worthiness; and other legislaticn,
particularly privacy regulations, affects the -xtent to which
schools can pursue delinquent borrowers. a review of 19
postsecondary schools showed that 14 had cumulative delinguency
rates of at least 18% and 8 had rates cf 30% or higher. Two-year
public and proprietary institutions apear to have the greatest
problem with delinquency. It is not likely that the majority of
schools participating in the program will ke able tc achieve a
self-sustaining revolving fund statue any time soon.
Recommendations: Review of existing program legislation which
requires schools to lend to nearly all eligible stvidents a7d of
privacy considerations that hamper their attemris to locate
borrowers might be warranted. (Author/SC)](ViewImageLocal?handle=hein.gao/gaobaaxav0001&div=1&collection=&method=preview&ext=.png&size=3)