ERIC Number: ED227776
Record Type: Non-Journal
Publication Date: 1983-Feb
Reference Count: N/A
Student Loan Default Rates in Perspective. Policy Brief.
Hauptman, Arthur M.
Perspectives on defaults occurring under the two major federal student loan programs, Guaranteed Student Loans (GSL) and National Direct Student Loans (NDSL), are presented. Attention is directed to differences in the size and mode of operation of these programs, the extent and costs of default, comparisons with other types of loans, and the outlook for future loan defaults and costs. It is noted that default rates in the larger program, GSL, are lower than in NDSL, while default rates for both programs in 1981 were slightly lower than in 1980. The default rates for private sector loans are less than those on student loans. It is suggested that the government should develop an annual measure of student loan defaults. The GSL program has made over 20 million loans worth $35 billion from 1965 through the end of 1982, while the NDSL program has made 7 million loans, totalling an estimated $8 million, from 1958 through the end of 1982. GSL default-related costs in 1981 and 1982 amounted to about 9 percent of total federal expenses. It is projected that in the next few years, default-related costs, and their share of total GSL program costs, will probably rise due to the unusually large volume of loans entering repayment and to projected declines in interest rates. (SW)
Descriptors: College Students, Expenditures, Federal Aid, Higher Education, Legal Responsibility, Loan Repayment, Program Costs, Student Loan Programs
American Council on Education, Division of Policy Analysis and Research, One Dupont Circle, N.W., Washington, DC 20036.
Publication Type: Opinion Papers
Education Level: N/A
Authoring Institution: American Council on Education, Washington, DC. Div. of Policy Analysis and Research.
Identifiers - Laws, Policies, & Programs: Guaranteed Student Loan Program; National Direct Student Loan Program