ERIC Number: ED228948
Record Type: RIE
Publication Date: 1983-Apr
Reference Count: 0
Study of the Special Allowance Formula of the Guaranteed Student Loan Program. Report No. 4.
National Commission on Student Financial Assistance, Washington, DC.
The special allowance component of the Guaranteed Student Loan (GSL) program was evaluated through research and hearings. Attention was directed to: the experiences of students and eligible lenders; the administrative costs of various types of eligible lenders; financial indicators that accurately reflect the costs of capital; and administrative mechanisms for rapidly disseminating to lenders the quarterly rate of the special allowance. It was recommended that the special allowance formula be retained in its current form. The allowance formula is one of several interrelated loan program provisions that have successfully contributed to lender participation and the supply of loan capital. Changes in any of these incentives would be viewed by lenders as increasing their risks and possibly would decrease their participation in the program. There is strong evidence that any reduction in the special allowance would disrupt the supply of education loan capital and reduce lender participation. There was no conclusive evidence that lender profits from the current special allowance formula are too high. Two papers are appended: "A Review of the Guaranteed Student Loan Special Allowance" (Wharton Applied Research Center); and "Review of Special Allowance Issues" (Applied Systems Institute, Inc.) (Author/SW)
Publication Type: Reports - Evaluative
Education Level: N/A
Sponsor: Congress of the U.S., Washington, DC.
Authoring Institution: National Commission on Student Financial Assistance, Washington, DC.
Identifiers: Guaranteed Student Loan Program; National Comm on Student Financial Assistance