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

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

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

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Just 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 borrower have generally speaking remained constant or dropped. The rise as a whole administrative expenses mostly outcomes from a rise of over 300 % into the wide range of Direct Loans through that time period that is same. One primary factor contributing to this loan volume enhance ended up being a legislation that finished student loan originations under a federally guaranteed loan program causing brand brand new originations being made underneath the Direct Loan program. Loan servicing–which includes pursuits like counseling borrowers on choosing payment plans, processing re payments, and collecting on loans in delinquent status–is the category that is largest of administrative expenses, comprising 63 per cent of total Direct Loan administrative expenses in financial 12 months 2012.

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