ERIC Number: ED331349
Record Type: Non-Journal
Publication Date: 1991-Mar
Reference Count: N/A
Perkins Student Loans. Need for Better Controls over Loans Recovered from Closed Schools. Report to the Secretary of Education.
General Accounting Office, Washington, DC. Div. of Human Resources.
This report examines the Perkins Student Loan Program, and in particular, the weaknesses in the Department of Education's policies, procedures, and practices for recovering Perkins loan fund assets from schools that go out of business. The report reveals that when schools in the Perkins Student Loan Program close, the Department of Education lacks: (1) adequate guidance for accurately determining the value of assets due from the schools, and (2) a system for calculating and reconciling the value of assets returned with the amounts due. As a result, the Department does not know whether all Perkins assets are being received and accounted for. Additionally, the report reveals that Perkins loans recovered from closed schools are not promptly entered into the Department's debt-collection system, thereby allowing them to be serviced. As of June 1990, the Department had a 10-month backlog of loans to be serviced. Department officials also claimed that they expected school closures to increase further because of recent changes to the Higher Education Act and agreed that delays in recording and servicing loans acquired from closed schools can contribute to increased loan defaults. Conclusions and recommendations are included. (GLR)
Descriptors: Administrative Problems, Assessed Valuation, Evaluation Methods, Federal Aid, Higher Education, Loan Default, Loan Repayment, Paying for College, Program Termination, Property Accounting, School Closing, Student Loan Programs
United States General Accounting Office, P.O. Box 6015, Gaithersburg, MD 20877 (1-5 copies, free, additional copies, $2.00 ea., 25% discount on 100+ copies).
Publication Type: Information Analyses; Reports - Descriptive
Education Level: N/A
Authoring Institution: General Accounting Office, Washington, DC. Div. of Human Resources.
Identifiers - Laws, Policies, & Programs: Perkins Loan Program