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

Federal Student Loans: orrower Interest Rates Cannot Be Set beforehand to exactly and Consistently 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 constant or dropped. The rise as a whole administrative expenses mainly results from a rise of over 300 % within the quantity of Direct Loans through that exact same period of time. One main factor contributing to this loan amount 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 picking payment plans, processing re re payments, and collecting on loans in delinquent status–is the biggest category of administrative costs, comprising 63 % of total Direct Loan administrative expenses in financial 12 months 2012. Continue reading “Federal Student Loans: orrower Interest Rates Cannot Be Set beforehand to exactly and Consistently Balance Federal Revenues and expenses”