ERIC Number: ED195188
Record Type: RIE
Publication Date: 1980-Mar
Reference Count: 0
State Profits on Tax-Exempt Student Loan Bonds: Analysis and Options. Background Paper.
Gensheimer, Cynthia Francis
The source of profits earned by states as a result of tax-exempt bonds issued to raise funds for college student loans is analyzed, as are various proposals to reduce these profits. Background information about both student loan bond programs and student loans is presented, along with an explanation of how issuers of student loan bonds are able to accumulate surpluses. The magnitudes of the surpluses are estimated. The legislative history of the provisions making the profits possible is traced, and pending proposals to restructure the federal student loan program and the probable effect of these proposals on student loan bonds are also considered. Options for congressional consideration that would reduce the profitability of student loan bonds are examined. It is concluded that except for the option of taking no action, each option would restrict either the profitability of student loan bonds or the uses to which states could put profits. Because each option would reduce one of the federal subsidies of student loan bonds, each would cut federal costs. The other main consideration in weighing the options is the degree to which each would decrease student loan availability. (SW)
Descriptors: Bond Issues, Educational Finance, Federal Programs, Federal State Relationship, Financial Policy, Financial Support, Fund Raising, Higher Education, State Action, State Aid, State Government, Student Loan Programs
Congressional Budget Office, Washington, DC
Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: Congress of the U.S., Washington, DC. Congressional Budget Office.