04 Sep Federal Student Loans: orrower Interest Rates Cannot Be Set ahead of time to correctly and regularly Balance Federal Revenues and Costs
GAO-14-234: Posted: Jan 31, 2014. Publicly Released: Jan 31, 2014.
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Just Exactly Exactly What GAO Found
Complete Direct Loan administrative expenses grew 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 growth of over 300 per cent when you look at the wide range of Direct Loans through that exact same time frame. One main factor contributing to this loan amount enhance had been a legislation that finished student loan originations under a federally guaranteed loan program leading to brand brand new originations being made underneath the Direct Loan program. Loan servicing--which includes pursuits like counseling borrowers on picking payment plans, processing re re re payments, and gathering on loans in delinquent status--is the category that is largest of administrative expenses, comprising 63 % of total Direct Loan administrative expenses in fiscal 12 months 2012. While total administrative expenses have increased, costs per debtor as well as other product expenses have actually remained constant or declined. For instance, the servicing expense per debtor has remained approximately $25 on the six-year duration we examined.