ERIC Number: ED228928
Record Type: Non-Journal
Publication Date: 1983-Mar
Reference Count: N/A
Study of the Cost to Borrowers of Participating in the Guaranteed Student Loan Program. Final Report.
Touche Ross and Co., Washington, DC.
The cost to a typical borrower of participating in the Guaranteed Student Loan (GSL) program was studied, based on the analysis of automated models that calculate total borrower costs under various scenarios. The focus was related to the actual costs of obtaining and repaying a student loan. Conclusions are as follows: (1) student borrowers under the GSL program usually pay in real terms (adjusted for inflation) an effective interest rate of close to zero, or in many cases, less than zero; (2) borrowers who hold loans for longer periods of time before entering repayment are able to realize more of an advantage than borrowers who enter repayment more quickly; (3) the Parent Loans for Undergraduate Students (PLUS) do not have the same advantages for borrowers as do student loans; (4) borrowers who can delay the start of repayment while enjoying the benefits of a federal interest subsidy have a major incentive to borrow; and (5) the real cost to the federal government is higher for student loans than for PLUS loans. In addition to the findings, attention is directed to the research methodology, three scenarios (high, moderate, and low cost institutions); borrower cost model descriptions, description of the GSL program, and a summary of selected literature and a list of sources. (SW)
Publication Type: Reports - Evaluative
Education Level: N/A
Sponsor: National Commission on Student Financial Assistance, Washington, DC.
Authoring Institution: Touche Ross and Co., Washington, DC.
Identifiers - Laws, Policies, & Programs: Guaranteed Student Loan Program