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

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

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 expenses mainly outcomes from a rise of over 300 % when you look at the amount of Direct Loans throughout that time period that is same. One factor that is key to this loan volume enhance ended up being a legislation that finished education loan originations under a federally guaranteed loan program leading to brand new originations being made underneath the Direct Loan system. Loan servicing–which includes pursuits like counseling borrowers on picking payment plans, processing re payments, and gathering on loans in delinquent status–is the category that is largest of administrative expenses, comprising 63 percent of total Direct Loan administrative expenses in financial 12 months 2012. »