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DOCUBENT RESUME
05933 - [B1386415]
The Veterans ,Administration Education Loan Program. May 16,
1978. 19 pp.
Testimony before the Hcuse Committee on Veterans@ Affairs:
Education and Training Subcommittee; by Gregory J. Ahart,
DiLector, Human Resources Div.
Contact: Human Resources Div.
Organization Concerned: Veterans Administration.
Congressional Relevance: House Committee on Veterans' Affairs:
Education and Training Subcommittee.
Authority: Vietnam Era Veterans$ Readjustment Assistance Act of
1974 (P.L. 93-508). Tax Reform Act of 1976 (26 u.S.C. 6103).
P.i. 94-502. P.I.o 95-102. 38 U.SlC. 1798.
The Veterans and Dependents Education Lcan Program
administered by the Veterans Administration #VA) has been
growing since its beginning in 1974 and, in che first quarter of
1978, 8,800 loans totaling $11.4 million were made. However, the
program has not effectively met the congressional intent of
providing financial aid to needy students attending bigh cost
institutions because VA has not restricted lcan eligibility to
veterans attending high tuition schools and has :,ot provided
adequate criteria for evaluating financial needs ox defined
allo'able education-related expenses. Only 28% of loans in
regions examined were made to veterans attending higL tuition
schools. During the first 3 years of the program, 71% 'f loan
applications analyzed were denied bccause financial ne-3 was not
shown. All resoui;ces are not considered in determining tinancial
need, and alternative gu.4delinns are needed. 1he loan default
rate has been high, 44X according to VA data, and possibly up to
55% according to GAO estimates. The high default rate resulted
primarily from problems in collection procedures such as:
borrowers were not contacted promptly after leaving school, due
dates for first payments were not clear, collection letters need
to be strengthened, some regions were not offsetting defaulted
loans against benefits, legisltion doas not give VA authority
to require reduced repayment periods for small lcans, and
efforts to locate veterans were hampered by a recent Internal
Revenue Service (IRS) ruling which d, as not alloo the IRS +o
provide address information. (HTW)](ViewImageLocal?handle=hein.gao/gaobadxzn0001&div=1&collection=&method=preview&ext=.png&size=3)