ERIC Number: ED364131
Record Type: Non-Journal
Publication Date: 1993-Jun
Reference Count: N/A
[Higher Education Assistance Foundation (HEAF) 1992 Financial Condition.]
Morra, Linda G.
This letter report by the Director of Education and Employment Issues in the U.S. General Accounting Office responds to a request from Senator Edward M. Kennedy for information on the federal costs involved for liquidation activities of the Higher Education Assistance Foundation (HEAF) in fiscal year (FY) 1992, the second year of the agreement to liquidate this institution. It explains how the federal government's net costs for the HEAF liquidation in FY 92 were $6.9 million and discusses potential costs during the institution's final year, FY 93. The report lists several factors that will increase HEAF's costs in FY 93, factors affecting the government's ability to recover costs, and ways in which the Department of Education's calculations differ from those of the General Accounting Office. It reports that among the factors increasing costs for FY 93 are: (1) $1.1 million in severance payments to HEAF employees; (2) an estimated $4.5 million payment to collection agencies for HEAF-guaranteed loans; (3) a final payment of about $7.8 million to Sallie Mae for managing HEAF during the liquidation; and (4) the establishment of a contingency reserve fund. The department's ability to offset increasing costs are seen to depend on the cumulative federal costs of the HEAF liquidation at year's end, the size and characteristics of the portfolio of loans, and the amount of collection penalties. (GLR)
Publication Type: Reports - General
Education Level: N/A
Authoring Institution: General Accounting Office, Washington, DC. Div. of Human Resources.