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

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

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Exactly Exactly What GAO Found

Complete Direct Loan costs that are administrative from $314 million to $864 million from financial years 2007 to 2012, but federal expenses per debtor have generally speaking remained steady or dropped. The rise as a whole administrative expenses mainly outcomes from a growth of over 300 % into the quantity of Direct Loans throughout that exact same time frame. One factor that is key to this loan amount enhance had been a legislation that finished education loan originations under a federally guaranteed loan program leading to brand new originations being made under the Direct Loan system. Loan servicing–which includes pursuits like counseling borrowers on choosing payment plans, processing re re payments, and gathering on loans in delinquent status–is the biggest category of administrative costs, comprising 63 per cent of total Direct Loan administrative expenses in financial 12 months 2012. Read more