ERIC Number: ED369368
Record Type: Non-Journal
Publication Date: 1994-Apr
Reference Count: N/A
The Effects of Higher Loan Limits and Need Analysis Changes on FFELP Borrowing in Pennsylvania, July to December 1992 to 1993.
Redd, Kenneth E.
This study examined the effects of the Higher Education Amendments of 1992 on Federal Family Education Loan Program (FFELP) borrowing in Pennsylvania during the July-to-December periods of 1992 to 1993. The Amendments increased the annual borrowing limits for the Federal Stafford loans and Federal Supplemental Loans for Students (SLS), eliminated the PLUS loan limits, eliminated home and family farm equity from consideration for financial eligibility for Stafford Loans, and allowed families with gross annual incomes of less than $50,000 to use a simplified needs test to determine their financial eligibility. During the study period, the number of Stafford Loan borrowers rose by 18 percent, the number of subsidized borrowers increased by 26 percent, and loan volume grew by 38 percent. SLS borrowing grew by over 72 percent, and loan dollars increased by nearly 133 percent. PLUS borrowing grew by 31 percent and dollars increased by 64 percent. The number of lower-income and middle-income unsubsidized borrowers fell dramatically as these students became eligible for subsidized loans, while the number of unsubsidized borrowers from upper-income families grew. Analysis suggests that changes in need analysis have allowed students to borrow more than they actually need to meet the costs of education. The increases in borrowing will lead to more borrowers graduating from postsecondary institutions with larger debt burdens, which may lead to rising numbers of loan defaults. (JDD)
Publication Type: Reports - Research; Numerical/Quantitative Data
Education Level: N/A
Authoring Institution: Pennsylvania Higher Education Assistance Agency, Harrisburg.
Identifiers - Location: Pennsylvania
Identifiers - Laws, Policies, & Programs: Family Education Loan Program; Higher Education Act Amendments 1992