NCJ Number
69448
Date Published
1979
Length
4 pages
Annotation
IN 1977 THE GENERAL ACCOUNTING OFFICE (GAO) REVIEWED THE ADMINISTRATION OF THE NATIONAL DIRECT STUDENT LOAN (NDSL) PROGRAM, WHICH IS ADMINISTERED BY THE OFFICE OF EDUCATION (OE) TO POSTSECONDARY SCHOOLS.
Abstract
GAO NOTED FIRST THAT INSTITUTIONS TRYING TO ESTABLISH NDSL PROGRAMS EXPERIENCED CONSIDERABLE DIFFICULTY IN OBTAINING UP-TO-DATE PROGRAM GUIDANCE FROM THE OE. SECOND, ALTHOUGH THE GAO FOUND FEW PROBLEMS WITH INSTITUTIONS ADHERING TO PROGRAM ELIGIBILITY REQUIREMENTS, PARTICIPATING SCHOOLS GENERALLY FAILED TO ROUTINELY CHECK OTHER SOURCES OF FEDERAL AID GOING TO LOAN RECIPIENTS (E.G., APPLICANTS RECEIVING VETERAN BENEFITS DID NOT LIST THEM AS A RESOURCE ON THEIR FINANCIAL AID APPLICATIONS). THIRD, AS OF FISCAL YEAR 1970, ALMOST 21 PERCENT OF NDSL INSTITUTIONS HAD EXPERIENCED DELINQUENCY RATES RANGING BETWEEN 11 AND 30 PERCENT, AND 7 PERCENT OF THE INSTITUTIONS HAD DELINQUENCY RATES RANGING FROM 31 TO 60 PERCENT. THE FINAL TWO PROBLEM AREAS ADDRESSED BY THE GAO CONCERNED OE'S NEED TO ASSIST AND MONITOR THE PERFORMANCE OF INSTITUTIONS PARTICIPATING IN THE NDSL PROGRAM, AND THE INADEQUACY OF REPORTING REQUIREMENTS AND TABULATING PROGRAM DATA. GAO RECOMMENDED THAT PROMPT ACTION BE TAKEN TO PROVIDE NECESSARY PROGRAM GUIDANCE TO PARTICIPATING INSTITUTIONS, THAT AN ATTEMPT BE MADE TO COLLECT NDSL ACCOUNTS BEFORE WRITING THEM OFF, AND THAT FINANCIAL AID OFFICERS BE INSTRUCTED TO COORDINATE VARIOUS TYPES OF AID RECEIVED BY STUDENTS TO AVOID MAKING STUDENT LOANS THAT EXCEEDED THEIR NEEDS. FURTHER, INSTITUTIONS THAT HAVE HIGH OR INCREASING DELINQUENCY RATES MUST BE INSTRUCTED HOW TO FOLLOW PRESCRIBED COLLECTION PROCEDURES, INVESTIGATIONS SHOULD BE CONDUCTED AT SUCH INSTITUTIONS TO DETERMINE THEIR COMPLIANCE WITH OE PROCEDURES, AND THOSE INSTITUTIONS THAT DO NOT COOPERATE WITH OE PROCEDURES SHOULD BE SUSPENDED. OE PROGRAM OFFICIALS RESPONDED TO GAO'S RECOMMENDATIONS BY REQUESTING ADDITIONAL STAFF, AS A LACK OF STAFF WAS THE MAIN REASON WHY MORE OF THESE OBJECTIVES WERE NOT FULFILLED. ONE NOTE IS PROVIDED.