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HRD-80-125 1 (1980-09-22)

handle is hein.gao/gaobabbax0001 and id is 1 raw text is: 



GAO
United States General Accounting Office            Human Resources
Washington, DC 20548                               Division


  B-200138
                                              SEPTEMBER 22, 1980


  The Honorable Shirley M. Hufstedler

  The Secretary of Education

  Dear Madam Secretary:

       Subject:    tatus of Special National Direct Student
                 Loan Fund!J(HRD-80-125)

       Recently, we initiated a survey of the effectiveness
  of educational institutions' efforts .to collect defaulted
  National Direct Student Loans (NDSLs). Our survey included
  five institutions each with an NDSL ddfault rate of at
  least 25 percent and defaults totaling $100,000 or more.

       The NDSL program provides for establishing a revolving
  fund a-t postsecondary educational institutions from which
  long-term, low-interest loans are made to qualified students
  who need financial assistance. The institutions are respon-
  sible for making and collecting the loans,.

       Under the NDSL program, the Federal contribution repre-
  sent~s90 percent of the loan funds, and the institution pro-
  vides the other 10 percent. In addition to this method of
  financing the NDSL program, the Higher Education Act of
  1965 (20 U.S.C. 1061) permitted institutions to use Federal
  grant funds as additional Federal contributions. Section
  407(b)(1) of the 1965 act allowed institutions to use up
  to 25 percent of the Educational Opportunity Grant funds
  paid to them before July 1, 1970, as,an additional Federal
  contribution for their loan programs. (The Educational
  Opportunity Grant program became known as the Supplemental
  Educational Opportunity Grant program under the Education
  Amendments of 1972.) Institutions established special
  NDSL funds with this additional Federal contribution.
  Unlike the Federal contribution to the regular NDSL program,
  institutions were not requir d to match the Federal contribu-
  tion to the special NDSL fund,,,

                                      . .(104503)


               113357

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