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HRD-81-124 1 (1981-09-30)

handle is hein.gao/gaobabcmm0001 and id is 1 raw text is: 


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REPORT BY THE


Comptroller General


OF THE UNITED STATES


Stronger Actions Needed

To Recover $730 Million In Defaulted

National Direct Student Loans



The National Direct Student Loan program
has been plagued by high default rates, result-
ing in defaulted loans totaling about $730
million.


Schools GAO visited rade inadequate efforts
to collect defaulted loans. Schools need to
adopt a tougher attitude toward collecting
defaulted loans, and the Department of Edu-
cation should take stronger actions against
those that fail to do so.

Schools have forwarded to the Department
for collection about 240,000 loans with
outstanding balances of $215 million. But
various problems have slowed the Depart-
ment's collection efforts. In recent months,
collections have doubled; through March
1981 the Department had collected $5.8 mil-
lion. The Department plans to contract with
private collection agencies for future loan col-
lections. Also, to motivate defaulters to pay
their debts, the Department will allow credit
bureaus to redisclose student loan default
data to the general credit industry.


    ,SD S71

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116561


       HRD-81-124
SEPTEMBER 30, 1981


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