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ERIC Number: ED356726
Record Type: Non-Journal
Publication Date: 1993
Pages: 10
Abstractor: N/A
Reference Count: N/A
Direct Government Lending: The Bottom Line. A Critique of GAO's Report on Guaranteed Student Loans versus Direct Lending and Revised Savings Estimates.
Quick, Perry D.
This report addresses the dollar savings described in the Government Accounting Office's (GAO) report supporting direct lending as opposed to the present guaranteed student loan program. The critique explains the changes in the GAO model assumptions and projections that are believed necessary to move from the original $4.8 billion savings to a more reasonable figure. The new figure reflects: (1) 1992 amendments to the Higher Education Act; (2) the current interest rate and inflationary outlook; and (3) more reasonable assumptions about how the shift to direct lending will affect financial markets, educational institutions, student behavior, loan flows, and processing and servicing activities. The updated and revised estimates suggest that the shift from the current guaranteed student loan program to direct lending would generate essentially zero budgetary savings; in fact, it suggests that a $13 million loss, in present value terms, over the 5-year budget period could be experienced. (GLR)
Public Affairs Office, USA Group, Inc., P.O. Box 6180, Indianapolis, IN 46206-6180.
Publication Type: Reports - General
Education Level: N/A
Audience: Administrators; Policymakers; Practitioners
Language: English
Sponsor: USA Group, Inc., Indianapolis, IN.
Authoring Institution: Ernst & Young, Washington, DC.
Identifiers - Laws, Policies, & Programs: Family Education Loan Program