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ERIC Number: ED477241
Record Type: Non-Journal
Publication Date: 2003-Apr
Pages: 39
Abstractor: N/A
Reference Count: N/A
ISBN: N/A
ISSN: N/A
Student Financial Aid: Monitoring Aid Greater Than Federally Defined Need Could Help Address Student Loan Indebtedness. Report to the Honorable Rod Paige, Secretary of Education.
Ashby, Cornelia M.
This study was conducted to determine how often federal financial aid recipients received aid that was greater than their federally defined need and what cost or other implications might result from changing the Higher Education Act (HEA) to limit such aid. Data came from the 1999-2000 National Postsecondary Student Aid Study for full-time, full-year undergraduates. Researchers developed a multiple regression model to identify student, school, and financial aid package characteristics associated with receiving aid greater than student need. Federal laws and regulations were reviewed, and interviews were held with officials at the U. S. Department of Education. Findings show that in school year 1999-2000, of the 3.4 million full-time/full-year federal aid recipients, 22% (732,000) received a total of $2.96 billion in financial aid that was greater than their federally defined financial aid. Of these, 628,000 received an estimated $2.72 billion in such aid by obtaining nonneed-based loans, identified as substitutable loams, that families borrow to meet their expected family contribution. Another 104,000 federal aid recipients received an estimated $238 million in such aid as a result of receiving aid from federal and nonfederal sources. Changing the HEA to limit aid greater than students' federally defined financial need is not likely to achieve significant savings, although the use of nonsubstitutable loans may increase overall student indebtedness. The General Accounting Office (GAO) recommends that the U.S. Department of Education monitor the impact of such loans on student loan debt burden and if debt burden rises substantially, the Department should develop alternatives to help students manage student loan debt burden. Four appendixes discuss the objectives, scope, and methodology, describe logistic regression, present comments from the Department of Education, and list GAO contacts and staff members. (SLD)
U.S. General Accounting Office, 441 G Street NW, Room LM, Washington, DC 20548. Tel: 202-512-6000; Fax: 202-512-6061.
Publication Type: Legal/Legislative/Regulatory Materials; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: General Accounting Office, Washington, DC.