ERIC Number: ED434591
Record Type: Non-Journal
Publication Date: 1999-Jul
Reference Count: N/A
Student Loans: Default Rates Need To Be Computed More Appropriately. Report to Congressional Requesters.
Hembra, Richard L.
This report examines how the Department of Education calculates the default rate for two federal student loan programs--the Federal Family Education Loan program (FFELP) and the William D. Ford Federal Direct Loan Program (FDLP). The report focuses on three questions regarding these programs: (1) whether there has been an increase in the number of borrowers who entered repayment but subsequently received deferments or forbearances; (2) what the effect on default rates would have been if borrowers in deferment or forbearance were excluded from the default rate calculation; and (3) if the latter method of calculation had been used, would any additional schools have exceeded the 25 percent default rate threshold. The report found that student loans in deferment or forbearance have increased for all types of schools; that default rates rose when borrowers with deferments and forbearances were excluded; and that under the recalculated default rate more schools would have exceeded the 25 percent threshold. The report also notes Department of Education objections to changing the method of calculating the default rate, but concludes by suggesting that Congress consider this change. Appended to the report are sections on scope and methodology and comments from the Department of Education. (CH)
Descriptors: Educational Finance, Federal Programs, Higher Education, Loan Default, Loan Repayment, Student Financial Aid, Student Loan Programs, Student Responsibility
U.S. General Accounting Office, P.O. Box 37050, Washington, DC 20015. Tel: 202-512-6000; Fax: 202-512-6061 (first copy free, additional copies $2 each).
Publication Type: Legal/Legislative/Regulatory Materials
Education Level: N/A
Authoring Institution: General Accounting Office, Washington, DC. Health, Education, and Human Services Div.
Identifiers - Laws, Policies, & Programs: Family Education Loan Program; Federal Direct Student Loan Program