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ERIC Number: ED351984
Record Type: RIE
Publication Date: 1992-Nov
Pages: 35
Abstractor: N/A
Student Loans. Direct Loans Could Save Billions in First 5 Years with Proper Implementation. Report to the Chairman, Subcommittee on Postsecondary Education, Committee on Education and Labor, House of Representatives.
General Accounting Office, Washington, DC. Div. of Human Resources.
This paper responds to a congressional request for more information concerning first, the potential cost savings from direct rather than guaranteed student loans and second, the ability of the Department of Education and postsecondary institutions to effectively manage a direct lending program. The report: (1) provides a more complete analysis of the potential savings under a direct loan approach, (2) explains how direct loans achieve cost savings, and (3) presents the results of focus group interviews that were conducted with financial aid administrators and school business officers from selected postsecondary education institutions to gauge their receptivity to direct lending. The report indicates that a direct loan program could achieve savings to the federal government within the first 5 years of $4.8 billion, enabling the government to partially offset program costs with borrowers' interest payments, reducing the cost of the interest benefit, and eliminating special allowance payments. The focus group discussions showed mixed views regarding institutions' ability to manage direct loan programs. Participants base this lack of confidence on factors ranging from time needed for the management of other programs to an apparent lack of interest in direct lending. Appendices include details of the study methodology, an analysis of statistical assumptions, a rationale for the focus group methodology, cost saving comparisons from the use of direct lending and a list of major contributors to the report. (GLR)
U.S. General Accounting Office, P.O. Box 6015, Gaithersburg, MD 20877 ($2, 100 or more, 25% discount).
Publication Type: Reports - General
Education Level: N/A
Audience: Policymakers
Language: English
Sponsor: N/A
Authoring Institution: General Accounting Office, Washington, DC. Div. of Human Resources.
Grant or Contract Numbers: N/A
Note: For a related report, see ED 338 185.