This document records the hearing of a Subcommittee of the House on its 3-month investigation of the College Housing Loan Program and the Academic Facilities Loan Program, which are administered by the Department of Education. These programs have awarded about $5 billion in loans to finance the construction of dormitories, dining halls, student unions, and other campus buildings. The loans have been made at an interest rate of around 3 percent spread over 30 to 40 years for each borrower. The majority of the loans--4.5 billion dollars worth--were made for college housing. Attention is directed to ways in which effective and efficient management of programs can be achieved. General Accounting Office audits of the Department of Education's management of the program have found the programs to be mismanaged, and the Department of Education to be lenient to colleges that have defaulted on their loans, which was confirmed by the Subcommittee's investigation. Included in this hearing are the Department of Education's audits of 10 institutions that had loans in default. Problems were found in billing and collection, loan security and controls, program regulations, staff utilization, and audit and inspection fees. Six of these 10 institutions were also in default on academic facilities loans. The hearing also includes letters and statements of Department of Education officials (Edward M. Elmendorf, Ronald Kimberling, and Mitchell L. Laine); as well as a paper entitled "Public Policy Debt Deferment for Higher Education Facilities Loans," written by Joseph P. O'Neill to attendees of a meeting sponsored by the Conference of Small Colleges, February 22, 1982 (minutes are included). (SW)