Federal Student Loans: orrower Interest Rates Cannot Be Set ahead of time to exactly and regularly Balance Federal Revenues and Costs

Federal Student Loans: orrower Interest Rates Cannot Be Set ahead of time to exactly and regularly Balance Federal Revenues and Costs

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

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Exactly What GAO Found

Complete Direct Loan administrative expenses expanded from $314 million to $864 million from financial years 2007 to 2012, but federal expenses per debtor have generally speaking remained constant or dropped. The rise as a whole administrative costs mainly outcomes from a growth of over 300 per cent when you look at the amount of Direct Loans throughout that same period of time. One factor that is key to this loan volume enhance had been a legislation that finished education loan originations under a federally guaranteed loan program leading to brand 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. Continue reading “Federal Student Loans: orrower Interest Rates Cannot Be Set ahead of time to exactly and regularly Balance Federal Revenues and Costs”