Budget and Spending: Direct Student Loan Savings - Government Accountability Office (GAO) report

Budget and Spending: Direct Student Loan Savings - GAO Report

Date:	July 15, 1993
Report No.:	HRD-93-25R
Pages:	4
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Subjects: Cost analysis Direct loans Government guaranteed loans Higher education Inflation Interest rates Loan repayments Student loans Dept. of Education Parent Loans for Undergraduate Students Program Dept. of Education Stafford Student Loan Program Dept. of Education Supplemental Loans for Students Program Dept. of Education Unsubsidized Stafford Loan Program Federal Family Education Loan Program National Direct Student Loan Program Aid for education Administrative costs Summary: Pursuant to a congressional request, GAO analyzed the estimated savings from implementation of a government financed direct student loan program during fiscal years 1994 through 1998, focusing on the impact of: (1) inflation; (2) interest rates; and (3) loan volume rates. GAO noted that: (1) the estimated savings from implementation of a direct loan program could total between $2.1 billion to $10.4 billion depending upon the financial scenario used; (2) the savings estimates were expressed in present value terms, and referenced the impact of the 1992 amendements and present value calculations for program costs; and (3) the scope of the analysis excluded loan repayments, proposed borrower interest rate reductions, income contingent repayments, and national service loan forgiveness.