Federal Student Loans: orrower Interest Rates Cannot Be Set beforehand to correctly and regularly Balance Federal Revenues and expenses

Federal Student Loans: orrower Interest Rates Cannot Be Set beforehand to correctly and regularly Balance Federal Revenues and expenses

GAO-14-234: Posted: Jan 31, 2014. Publicly Released: Jan 31, 2014.

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Exactly Just What GAO Found

Complete Direct Loan costs that are administrative from $314 million to $864 million from financial years 2007 to 2012, but federal costs per borrower have generally speaking remained constant or fallen. The rise as a whole administrative expenses mainly outcomes from a rise of over 300 per cent when you look at the quantity of Direct Loans through that exact same time frame. One primary factor contributing to this loan amount enhance ended up being a legislation that ended education loan originations under a federally guaranteed loan program leading to brand new originations being made underneath the Direct Loan system. Loan servicing–which includes pursuits like counseling borrowers on selecting payment plans, processing re re payments, and gathering on loans in delinquent status–is the biggest category of administrative expenses, comprising 63 % of total Direct Loan administrative expenses in financial 12 months 2012. Read More