Selected Characteristics of Schools in Two Major Federal Loan Programs
HEHS-97-45: Published: Jan 31, 1997. Publicly Released: Jan 31, 1997.
Pursuant to a congressional request, GAO provided information on the comparative levels of activity in the William D. Ford Federal Direct Loan Program (FDLP) and the Federal Family Education Loan Program (FFELP), focusing on the: (1) distribution of student loans between the two programs; (2) loan default rate for schools associated with each program; and (3) number of schools in each program on a state-by-state basis and among the 100 largest postsecondary schools participating in these federal loan programs.
GAO found that: (1) as of October 1996, 1,622 schools were in FDLP, that is, about 26 percent of schools participating in either of the federal loan programs; (2) while many of these schools in FDLP were also in FFELP, the remaining 74 percent of all schools were solely in FFELP; (3) public 4-year and proprietary schools were the most represented kind of schools in FDLP, and 42 and 41 percent of them, respectively, were chosen by the Department of Education to be in the program; (4) the percentage of federal student loan volume provided by FDLP was 7 percent in school year 1994-95 and 30 percent in school year 1995-96; (5) not enough time has elapsed for loan default information to be available for FDLP; (6) for FFELP, a comparison of default rates for schools that used both programs and schools that used FFELP exclusively showed that rates were similar; (7) for schools in FDLP, the FFELP default rate was 10.2 percent for the fiscal year (FY) 1993 cohort year, and for schools only in FFELP, the rate was 9.9 percent; (8) every state has schools in FDLP, although the proportion of schools in the program varies considerably; (9) thirteen states had more than half of their FY 1995 loan volume at FDLP schools, while 17 states had less than 25 percent; (10) the 100 largest schools, a list that primarily includes 4-year public schools but also includes some community colleges and private 4-year schools, were evenly divided as to whether they were in FDLP; and (11) fifty schools were in FDLP and 50 were not.